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The Hong Kong Monetary Authority (HKMA) announced today (October 27) that the Banking (Capital) Rules and Banking (Disclosure) Rules were published in the Gazette today and will be tabled before the Legislative Council (LegCo) for negative vetting next Wednesday, November 1, 2006.
The two sets of Rules, which are subsidiary legislation, are made by the Monetary Authority under new powers provided by sections 98A and 60A of the Banking Ordinance (which were introduced by the Banking (Amendment) Ordinance 2005). The Rules are to prescribe how the capital adequacy ratio (CAR) of locally incorporated authorised institutions shall be calculated and what information on the state of affairs, profit and loss and CAR shall be publicly disclosed by authorised institutions. For more information about the Rules, please access the "Basel II" icon in the HKMA website at: www.hkma.gov.hk.
The Rules form an integral part of a new capital adequacy regime to be adopted in Hong Kong to implement, in a manner considered appropriate for the particular circumstances of the local banking industry, the revised framework on capital commonly known as "Basel II". The Rules have been finalised after extensive consultation with the banking industry and other interested parties.
Mr William Ryback, Deputy Chief Executive of the HKMA, said that "the adoption of the Rules, which have been developed substantially based on the revised capital adequacy standards set out under Basel II, will contribute to greater robustness of the banking system and greater banking stability. In developing the Rules, the HKMA has benefited substantially from the comments of the industry, and we are grateful for their contribution and support."
Subject to the satisfactory completion of the negative vetting process by LegCo, the two sets of Rules will come into operation on January 1 2007.
Ends/Friday, October 27, 2006
Issued at HKT 16:32
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