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BANKING BILL
BANKING BILL
(a) paid-up capital;
(b) perpetual subordinated debt convertible into equity at option of issuer, but
excluding any amount in excess of half the paid-up capital;
(c) general reserves, including inner reserves, share premium account and revaluation reserves, but excluding provisions however described; and
(d) undistributed profits, but excluding unprovided but declared dividends not
yet paid,
and by deducting the value, in Hong Kong dollars, of its-
(i) investments in any subsidiary, any associated company and any holding
company;
(ii) loans and other expenses which, in the opinion of the Commissioner, are of
a capital nature; and
(iii) goodwill.
3.
The risk assets of an authorized institution shall be calculated by adding the value, in Hong Kong dollars, of the assets specified in each of the following categories after each such value has been multiplied by the risk weight specified for that category-
(a) Category I—risk weight 0.0——
(i) Government certificates of indebtedness held for note issue; (ii) cash in till; and
(iii) contingent liabilities in respect of forward foreign exchange con- tracts, interest rate swaps, option contracts, futures contracts, bills held for collection of customers, and shipping guarantees and trust receipts in respect of unmatured trade finance transactions;
(b) Category II—risk weight 0.2—
(i) unsubordinated claims on or contingent liabilities in respect of eligible banks or eligible governments, or having such banks or govern- ments unconditional guarantee, maturing or callable within less than one year;
(ii) claims or contingent liabilities secured by cash or cash deposits with the institution and under its complete control; and
(iii) bullion or listed securities held against the institution's liability to customers or under resale agreements;
(c) Category III—risk weight 0.5-----
(i) negotiable unsubordinated bills, notes, paper and listed securities, at current market value, with a remaining term to maturity of not less than one and not more than 10 years, drawn on or issued or guaranteed by eligible banks or eligible governments, and which are quoted on a stock exchange approved by the Commissioner for the purposes of this Schedule or by not less than 2 brokers recognized by the Commissioner for the purposes of this Schedule;
(ii) unmatured import and export trade finance through bills or notes maturing within 6 months;
(iii) unsubordinated claims on or contingent liabilities in respect of registered deposit-taking companies (except deposit-taking companies the registration of which is for the time being suspended under this Ordinance) or having such companies unconditional guarantee, maturing or callable within less than one year; and
(iv) all contingent liabilities not otherwise specified in this term, and including any net underwriting commitments;
(d) Category IV—risk weight 1.0-all other assets.
4.
For the purposes of this Schedule-
"eligible bank" means---
(a) any authorized institution which is a bank or licensed deposit-taking
company; and
(b) any other bank incorporated outside Hong Kong except such a bank which is, in the opinion of the Commissioner, not adequately supervised by the appropriate recognized banking supervisory authority of the place in which it is incorporated;
"eligible government" means
(a) the Government;
(b) any other government whose debt has not been in arrears at any time during the 5 years immediately preceding the date on which the relevant calculation of the capital to risk assets ratio is made; and
(c) any other government approved by the Commissioner for the purposes of
this Schedule.
1.
FOURTH SCHEDULE
LIQUIDITY RATIO
[ss. 106 & 139(3).]
The liquidity ratio of an authorized institution shall be calculated as that ratio, expressed as a percentage, between the qualifying liabilities, as specified in para- graph 2, and the liquefiable assets, as specified in paragraph 3, of the institution.
2.
The qualifying liabilities of an authorized institution shall be calculated by adding the value, in Hong Kong dollars, of---
(a) its net interbank liabilities (including marketable claims); and
(b) all its other liabilities,
maturing or callable within one month.
3.
The liquefiable assets of an authorized institution shall be calculated by adding the book value or current market value, whichever is the lesser, in Hong Kong dollars, of such of its following assets which are freely available to meet any qualifying liabilities—
(a) net interbank claims (including marketable claims) maturing or callable
within one month;
(b) cash in till;
(c) gold;
(d) unmatured discountable export bills maturing within 6 months and export bills which are payable after sight, denominated in a currency freely convertible into Hong Kong dollars;
(e) bills, certificates, notes, paper and debt securities (other than marketable
claims maturing or callable within one month) which-
(i) are negotiable;
(ii) have a remaining term to maturity of not more than 10 years;
(iii) are issued by persons whose debts have not been in arrears within
the immediately preceding 5 years;
(iv) are denominated and traded in a currency freely convertible into Hong Kong dollars; and
(v) are quoted on a stock exchange approved by the Commissioner for the purposes of this Schedule or by not less than 2 brokers recognized by the Commissioner for the purposes of this Schedule;
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