Hong Kong plans to raise the maximum protection on bank deposits in a move designed to better shield people during times of severe stress.
The Hong Kong Monetary Authority proposed to increase the amount of savings covered by the government guarantee in the event of bank failure to HK$800,000 ($102,272) per depositor at each Hong Kong bank, up from HK$500,000, a consultation paper showed Thursday. The scheme covers both individuals and corporate account holders.
HKMA to Consult on Deposit Protection Scheme This Year: Yuen
Recent US bank failures reignited a debate around the world on savers’ protections, schemes where governments guarantee to pay depositors in the rare event of a bank collapsing. While the majority of large countries offer such a backstop, the demise of Silicon Valley Bank indicated a shortfall in the depositor protection program for smaller institutions.
Hong Kong is attempting a revival from years-long Covid restrictions that saw talent and capital leave. The domestic economy and its stock market are showing scant signs of a recovery six months after borders reopened, as data signaled the wider China economy is struggling. Last week the city relaxed some of its residential mortgage rules, allowing buyers a smaller downpayment.
