Chairman and Chief Editor
Bedour Ibrahim

The changes will allow more than 92% of the city’s depositors to be covered

Hong Kong to Raise Protection on Bank Deposits to HK$800،000

Tuesday 06/February/2024 - 06:08 PM
أصول مصر

Hong Kong will raise its guarantee on bank deposit savings to HK$800،000 ($102،000) starting at the earliest in the fourth quarter of this year to provide a better buffer during times of stress.

At a briefing on Tuesday، the Hong Kong Deposit Protection Board said the cap will be raised from the current HK$500،000. A bill for the changes will be introduced to the city’s Legislative Council in the next few months for an implementation in the fourth quarter، according to Board Chief Executive Officer Donald Chen. Other enhancements will come into force early 2025.

Covering depositors

The changes will allow more than 92% of the city’s depositors to be covered، according to Chen. Hong Kong’s protections are higher than Asian peers such as Japan and Singapore، but lower than the US and the UK، according to a handout from the Hong Kong Monetary Authority.

The review started in July last year after a string of US bank failures stoked a global debate on how much governments should guarantee bank savings in the event of financial stress and collapse of confidence to banking systems.

Another round of consultations to adjust the cap will commence in 2027 at a shorter review window of three years instead of five، in light of uncertain global landscape on deposit insurance.

The board is “open-minded” about room to further increase the protection limit in the future، and fully appreciates that policies should be adaptable to changing circumstances، Chen said.