1 / 20

Analysis of The Deposit Protection Scheme in Hong Kong

Analysis of The Deposit Protection Scheme in Hong Kong. Group No.: 3 Group List: Emily Kwong Kit-Man (053195) Nicole Chan Yu-Fong(053216) Carol Tsang Hing-Yee (053218) Sharon Chan Sze-Long (053228). CONTENT. Introduction Aims Operations and Coverage Analysis Example of Success - Canada

jodie
Télécharger la présentation

Analysis of The Deposit Protection Scheme in Hong Kong

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Analysis of The Deposit Protection Schemein Hong Kong Group No.: 3 Group List: Emily Kwong Kit-Man (053195) Nicole Chan Yu-Fong(053216) Carol Tsang Hing-Yee (053218) Sharon Chan Sze-Long (053228)

  2. CONTENT Introduction Aims Operations and Coverage Analysis Example of Success - Canada Comparison of the Scheme between Hong Kong and Canada Example of Failure - Japan Recommendations Opinions Conclusion

  3. Introduction • The most basic and common wealth • Depositing money in banks • Safe • How about if the banks go bankruptcy? • Hong Kong Deposit Protection Board • All of the licensed banks • Except those exempted by the board • Compensation limit: • $100,000 per depositor

  4. Aims • Reduce the risk of rumour-driven runs • The possibility of bankruptcy • Provides an orderly compensation method with the depositors • Lowers fall-out effects of a bank failure. • Open an account • Automatically joined the scheme

  5. Operations and Coverage

  6. History • Collapse of Bank of Credit and Commerce International • Lots of bank runs in Hong Kong • Notice the need of establishment • Published the public consultation • For the safety and the stability of the banking system • 2-year Preparations • The Deposit Protection Scheme Ordinance was enacted in May 2004 • 25th Sep 2006

  7. Example of success - Canada CDI run for almost 15 years until 1983, first deficit appeared To improve the scheme : • authorizing the CDIC with much more power to manage • supervise the insurance members, increasing the contribution rate • changing the fixed rate into flexible according to uncertain risk

  8. Comparison of the Scheme between Hong Kong and Canada

  9. Example of Failure – Japan • The Deposit Insurance Corporation of Japan (DICJ) • Built up from 1970 to 1991,no bankruptcy • Since the 1980sharp rise in stock and property market resulted in a bubble economy • With the loosen supervision of finance activities and declined industrial self-discipline • →a tremendous fluctuation of the economy

  10. Large amounts of bad debts and loss • Ruined the financial situations • Lots of bankruptcy and folding up • Improper macroeconomic policies • Could not function properly • Lost it independence • Because of the control of central bank • An institution combined with the government for financial supporting to organizations

  11. Recommendations To keep away from being failed, The HKMA should: • maintain the supervision on financial activities • prevent fluctuations in economy by using proper macroeconomic policies • ensured BDPS is independent from all other government bureaus so that its operation will not be interfered

  12. Our Opinions • Due to cancellation of interest agreement:- Banks can formulate own interest rate to attract depositors- Making small amount depositors fragil when banks go into crisis • Higher risk of moral hazard during risk management. • Lack of low risk taking premium insurance

  13. Conclusion • H.K. has no experience in DPS • There are still advantages: • References from experienced developed countries • Have examples of what NOT to do • Make improvement according to relevant failure

  14. Some reasons that makes H.K.’ s DPS better • Clear objectives:- Maintain financial stability- Protect small amount depositors • More vital and necessary for protection.- no other business portfolio for diversity of risk of deposit • All licensed bank has to participate • Not capable to buy insurance for the little amount of money they put in licensed bank

  15. Understanding independence is the key • A separate broad is set up for the supervision of the running of DPS • Effectively avoid moral hazards Finally, • We have enough evidence to show that DPS in Hong Kong is going to be a success

  16. References Books: Deposit insurance : actual and good practices Garcia, G. G. Washington, DC : International Monetary Fund, 2000 The design and implementation of deposit insurance systems Hoelscher, David S. Washington, DC : International Monetary Fund, c2006 The postmodern bank safety net [electronic resource] : lessons from developed and developing economi Calomiris, Charles W. Washington, D.C. : AEI Press, 1997 The political economy of deposit insurance Luc Laeven, Washington, DC : World Bank, 2004 Deposit insurance around the world : a comprehensive database Asli Demirguc-Kunt, Baybars Karacaovali, Luc Laeven; Washington, DC : World Bank, 2005 《存款保險制度研究 》 何光輝; 中國金融出版社; 2003 《存款保險：理論與實踐》 羅瀅; 社會科學文獻出版社; 2005 Journal, Magazine, Newspaper, and others 《中國要聞》建立存款保險制度有望邁出實質性步伐 - (經濟通) 17 Jan 07 http://hk.news.yahoo.com/070117/74/203tw.html 《中國要聞》人行官員稱將盡快出台存款保險法律法規 - (經濟通) 13 Nov 07 http://hk.news.yahoo.com/061113/74/1wb7q.html 銀行存款保險下周一實施 - (明報) 23 Sep 06 http://hk.news.yahoo.com/060923/12/1tj37.html 市民擔憂 保險費轉嫁 – (明報) 20 Sep 06 http://hk.news.yahoo.com/060919/12/1tb3n.html Video from FDIC http://www.vodium.com/MP/MPF/1.1.3/mpf.asp?xml=/vs_data/pn100318_fdic_di_2006/84B8FM1Q/mediapod.xml&type=mediapodflash

  17. Article: Hong Kong Democratic Foundation Deposit insurance no answer to banking problems, 4 September 1991 http://search.newyorkfed.org/search/frbny.jsp?querybox=Deposit+Insurance&search_submit.x=20&search_submit.y=8 Deposit Protection Scheme, 17 May 1992 http://www.hkdf.org/nl.asp?func=showarticle&type=2&article=237 Hong Kong Democratic Foundation Enhancing deposit protection in Hong Kong, 29 January 2001 http://www.hkdf.org/nl.asp?func=showarticle&type=2&article=147 Hong Kong Trade Development Council Does Hong Kong Need Deposit Insurance? May, 2000 http://www.tdctrade.com/econforum/hkcer/hkcer000801.htm The University of Hong Kong (School of Economics and Finance) Deposit Insurance in Hong Kong? September 1991 http://www.hku.hk/hkcer/articles/v10/rluk.htm The University of Hong Kong (School of Economics and Finance) Does Hong Kong Need Deposit Insurance? May/June 2000 http://www.hku.hk/hkcer/articles/v59/chu.htm Hong Kong SAR Government Information Centre Introducing Deposit Insurance in Hong Kong, March 2002 http://www.info.gov.hk/archive/consult/2002/deposit-e.pdf Federal Reserve Bank of San Francisco Asia Focus for March 15, 2005 http://www.frbsf.org/publications/banking/asiafocus/2005/AsiaFocus-March05.pdf

  18. Website: The Board of Deposit Protection in Hong Kong http://www.dps.org.hk/ The Hong Kong Monetary Authority http://www.info.gov.hk/hkma/index.htm Federal Deposit Insurance Corporation http://www.fdic.gov/deposit/index.html Deposit Insurance Corporation in Japan http://www.dic.go.jp/english/index.html College of Business Administration http://www.cba.unl.edu/dept/finance/ MingPao Forum http://forum.mingpao.com/cfm/Forum1.cfm Wikipedia http://www.wikipedia.org Yahoo! http://hk.yahoo.com/ Google http://earth.google.com/

  19. The end

More Related