4.
In 1981, the deposit-taking companies were divided into registered and licensed categories with
the latter having a larger capital and with different deposit-taking limitations. The so-called
"three-tier system" was thus introduced i.e. licensed banks, licensed deposit-taking companies
and registered deposit-taking companies.
5.
Events in the financial sector following the collapse of the stock and property markets in 1982 and 1983 caused the Government to examine its previous stance on and the general requirements of prudential supervision of banks and other deposit- taking companies.
These events included the
revocation of the registration of 8 well known
deposit-taking companies, runs on two banks, the taking over by the Government of the Hang Lung Bank
(September, 1983) and
1983) and the difficulties of Bumiputra
Malaysia Finance Ltd.
The major review of
by
prudential supervision began with a report consultants drawn from the Banking Supervision Department of the Bank of England. Their report,
made in 1984, was carried forward by close
consultation with all interested parties in Hong Kong beginning in February, 1985. Impetus was given to the review by the collapse of an exchange dealer who was found to be operating an illegal deposit-
taking company and of a deposit-taking
Dominican Finance Ltd.
company,
3