Based on the information publicly available at this stage, the Consumer Council generally welcomes the range of recommendations in the Hong Kong Banking Sector Consultancy Study commissioned by the Hong Kong Monetary Authority. In particular the Council welcomes the recommendations concerning liberalisation of the interest rate rules (IRRs) .
The Council has long argued for further liberalisation of the interest rate rules (IRRs) in relation to savings, demand and term deposit accounts (under seven days) to complete the deregulation of interest rates. Following the Council's report Are Hong Kong Depositors Fairly Treated? published in February 1994, the Government had originally agreed to a phased approach to deregulation of these accounts, to be completed by 1997. The Council notes that this study has indicated another phased approach to the reforms commencing year 2000. The Council would hope that the reforms will be implemented as soon as possible.
The Council also notes that the study has recommended that further deregulation should be introduced after a specific period of stability, characterised by relative containment of risk. The study indicated that containment of risk could be measured using a wide range of monetary, financial and market indicators and monitoring of these indicators should commence during 1999.
The Council stresses that the indicators should be clearly defined and the assessment results should be made known to the public. This will provide an element of transparency and certainty to the process.
It is only when these indicators are clearly specified and the assessment mechanisms made known, that Hong Kong consumers can feel confident the reforms as promised in the past, will be achieved.
The Council also welcomes the proposed study into establishing a depositor protection scheme. It is to be hoped that the results of this study will advance the limited protection currently available to Hong Kong consumers, and bring Hong Kong into line with world's best practice.