HKMA Proposes Two-Tier Banking System after Consultation

Consultation conclusions on review of three-tier banking system

The following is issued on behalf of the Hong Kong Monetary Authority:

The Hong Kong Monetary Authority (HKMA) published today (August 5) the conclusions on the public consultation relating to the review of the three-tier banking system (the Conclusions Paper). The Conclusions Paper sets out the key comments received in the consultation, the HKMA's responses to these comments, and the HKMA's proposal on implementing the new two-tier banking system.

The HKMA launched a three-month public consultation on June 26, 2023. In the consultation, the HKMA proposed to merge deposit-taking companies (DTCs) into the second-tier institutions, i.e. restricted licence banks (RLBs), with a transition period of five years, with the current requirements on RLBs in respect of minimum capital (i.e. HK$100 million) and minimum deposit size (i.e. HK$500,000) applied.

The HKMA received a total of seven submissions from the banking industry, professional bodies and relevant organisations in the consultation. The respondents were broadly supportive of the proposal. Having considered the feedback, the HKMA has introduced new parameters to the proposal with a view to streamlining the transition and minimising impact on existing customers of the DTCs, as follows:

"We are pleased to note the broad support of the respondents of the proposed simplification of the three-tier banking system into two-tier. We have carefully considered the suggestions received and adopted them as appropriate. The HKMA will provide guidance to the DTCs in their transition. Following the issuance of the consultation conclusions, the HKMA will work with the relevant parties to prepare the proposed legislative amendments to implement the proposal," said the Chief Executive of the HKMA, Mr Eddie Yue.

The Conclusions Paper is available on the HKMA website.

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SED to visit France

The Secretary for Education, Dr Choi Yuk-lin, will begin her visit to France tomorrow (September 10, France time). She will visit Lyon, Toulouse and Paris.

Dr Choi will attend WorldSkills Lyon 2024 organised by WorldSkills International. This year, Hong Kong will send its largest-ever delegation to the event to participate in over 30 competitions. Apart from giving her support to the delegation in person, Dr Choi will attend the WorldSkills Conference and speak at a panel discussion to promote vocational and professional education and training in Hong Kong.

In addition, Dr Choi will attend the European Association for International Education Conference and Exhibition in Toulouse to promote Hong Kong's unique competitive edge as an international higher education hub, and visit the Hong Kong Pavilion set up by the Heads of Universities Committee Standing Committee on Internationalisation to support the work of the eight University Grants Committee-funded universities in attracting more overseas students to study in Hong Kong.

During her tour, Dr Choi will visit Paris and call on international organisations. She will also visit research institutes and universities, as well as exchange views with Hong Kong youths studying or working in France.

Dr Choi will conclude her visit and return to Hong Kong on September 19 (France time). During her absence, the Under Secretary for Education, Mr Sze Chun-fai, will be the Acting Secretary for Education.

Source: AI-generated images