Hong Kong extends Depositor Protection Scheme
The Hong Kong Monetary Authority (HKMA) and Hong Kong’s Financial Services and the Treasury Bureau (FSTB) have issued a consultation paper on proposed enhancements to Hong Kong’s Deposit Protection Scheme (DPS).
The DPS, originally established in 2006, enhancements to the DPS are now to be implemented to provide a more reliable safeguard for depositors against the event of a bank failure.
Bearing in mind relevant reforms internationally during the last few years and recent assessment results from the International Monetary Fund, the Government proposes to accelerate the process of making deposit compensation to depositors when a bank fails.
For instance, a “gross payout” approach would be adopted to determine DPS compensation. A depositor would be compensated an amount up to the DPS protection limit, currently HKD500,000 (USD64,500), without the need to set-off the depositor’s liabilities against his/her protected deposits in the same bank at the time of determining and distributing the payouts, and more certainty would be provided for determining the reference date used for calculating the deposit compensation amount to accelerate the calculation.
A government spokesperson commented: “The proposed enhancements to the DPS will strengthen the financial safety net for general depositors, and further consolidate Hong Kong’s status as an international financial center.”
A public consultation on the proposal will last for three months, until December 12, 2014.
Source: lowtax- Hong Kong extends Depositor Protection Scheme
