3
TUESDAY, JULY 26, 1994
GOVT RESPONSE TO CONSUMER COUNCIL'S BANKING INDUSTRY STUDY
THE GOVERNMENT AGREES WITH THE BROAD DIRECTION OF THE RECOMMENDATIONS OF THE CONSUMER COUNCIL THAT THERE SHOULD BE INCREASED COMPETITION IN RETAIL DEPOSIT INTEREST RATES AND MORE DISCLOSURE OF FINANCIAL INFORMATION BY THE BANKING SECTOR, THE SECRETARY FOR FINANCIAL SERVICES, MR MICHAEL CARTLAND, SAID TODAY (TUESDAY).
POSITIVE STEPS FORWARD WOULD BE TAKEN ON BOTH FRONTS, SAID MR CARTLAND ON THE PUBLICATION TODAY OF THE GOVERNMENT'S RESPONSE TO THE CONSUMER COUNCIL'S INDUSTRY STUDY ON THE BANKING SECTOR.
THE GOVERNMENT RESPONSE IS BASED ON A STUDY PRODUCED BY THE HONG KONG MONETARY AUTHORITY (HKMA) WHICH HAS CARRIED OUT AN IN-DEPTH ANALYSIS OF THE ARGUMENTS AND SUPPORTING DATA IN THE CONSUMER REPORT PUBLISHED IN FEBRUARY THIS YEAR.
THE HKMA ALSO PUBLISHED ITS STUDY TODAY.
COUNCIL
COUNCIL
PACKAGE
MR CARTLAND SAID RECOMMENDATIONS OF THE CONSUMER DEALING WITH FINANCIAL DISCLOSURE COINCIDED LARGELY WITH THE RECOMMENDED BY A WORKING PARTY ESTABLISHED BY THE HKMA IN JANUARY THERE ARE ONLY MINOR DIFFERENCES IN EMPHASIS AND TIMING.
1994.
IMPLEMENTATION OF THE PACKAGE WOULD SUBSTANTIALLY INCREASE TRANSPARENCY OF AUTHORISED INSTITUTIONS PERFORMANCE AND FINANCIAL STRENGTH, MR CARTLAND SAID.
THE WORKING PARTY RECOMMENDED FULL DISCLOSURE OF BANKS PROFITS AND MORE DETAILED BALANCE SHEET INFORMATION.
IN CERTAIN AREAS, SUCH AS THE DISCLOSURE OF TRANSFERS ΤΟ OR
FROM INNER RESERVES IN RESPECT OF THE 1994 ACCOUNTS, THE PACE WILL FASTER THAN THAT PROPOSED BY THE CONSUMER COUNCIL.
BE
DETAILS OF THE ITEMS FOR DISCLOSURE IN THE 1994 ACCOUNTS WILL BE FINALISED IN AUGUST 1994.
ON DISCLOSURE OF BALANCE SHEET INNER RESERVES, THE HKMA WOULD UNDERTAKE A REVIEW IN MID-1995. THIS WOULD NOT PRECLUDE THE POSSIBILITY OF DISCLOSURE IN THE 1996 ACCOUNTS AS RECOMMENDED BY THE CONSUMER COUNCIL.
ON THE QUESTION OF DEPOSIT INTEREST RATES, MR CARTLAND SAID: "IN LINE WITH OUR FIRM BELIEF IN FREE MARKETS, THE GOVERNMENT AGREES THAT MORE COMPETITION IN RETAIL INTEREST RATES SHOULD BE ENCOURAGED AS IT WOULD BE CONDUCIVE TO PRODUCT INNOVATION AND GREATER EFFICIENCY.
"THE GOVERNMENT HAS THEREFORE ACCEPTED THE CONSUMER COUNCIL'S RECOMMENDATION ΤΟ REMOVE THE INTEREST RATE CAP ON TIME DEPOSITS IN
1995."
HE ADDED THAT FURTHER STEPS IN LIBERALISING THE INTEREST REGIME WOULD BE CONSIDERED ONLY WHEN THE IMPACT OF THE CHANGE IN HAD BEEN FULLY ASSESSED AND THE TRANSITIONAL ISSUES AFFECTING KONG SHOULD NO LONGER BE A FACTOR THAT WOULD NEED TO BE TAKEN ACCOUNT. IN PRACTICAL TERMS, THIS WOULD NOT BE BEFORE 1997.
RATE
1995
HONG
INTO
/THE GOVERNMENT