Banking amendment to be gazetted
December 08, 2011
The Banking (Amendment) Bill 2011, which seeks to enhance the existing regulatory framework to further strengthen the resilience of banks and the banking system in Hong Kong, will be gazetted tomorrow and tabled at the Legislative Council on December 21.
It will amend the Banking Ordinance to provide for the implementation of the regulatory framework released last December by the Basel Committee on Banking Supervision, commonly known as the Basel III framework, in Hong Kong.
Basel III is designed to strengthen capital and liquidity rules for banks, promoting greater resilience within the global banking sector.
The bill proposes the capital and liquidity requirements applicable to authorised institutions incorporated or operating in Hong Kong be set out in the rules prescribed by the Monetary Authority under the ordinance.
Such rules will be developed with reference to the requirements in Basel III and will be subsidiary legislation subject to negative vetting by the Legislative Council.
The bill also makes provision for the Monetary Authority to issue, or approve, codes of practice for the purpose of providing guidance in respect of the rules. The present Capital Adequacy Review Tribunal will also be able to assume a wider review remit to reflect the broader scope of the Basel III requirements.
Secretary for Financial Services & the Treasury Prof KC Chan said the implementation of Basel III will make the banking system in Hong Kong more resilient, contributing to the robustness and competitiveness of Hong Kong’s financial markets and economy.
Monetary Authority Deputy Chief Executive Arthur Yuen said as a member of the Basel Committee, the Monetary Authority has been actively involved in developing the Basel III framework and fully supports its implementation in Hong Kong.
The implementation of Basel III will keep Hong Kong in line with international standards, he said.
The Monetary Authority has consulted the banking industry on the proposals in the bill and will continue to work closely with the industry on the implementation of Basel III.
The Monetary Authority will draft and consult the industry on the required capital and liquidity rules in phases, reflecting the Basel Committee’s implementation timetable, with the first phase of capital requirements due to go into effect from the beginning of 2013.
