Chairman of the Association of Banks: no sign of the outflow of funds from Hong Kong

Recently the capital dominated the city, after the continuous adjustment of Hong Kong stocks, the market more worried about when the funds flow away. The chairman of the Hong Kong Association of Banks, Hkab, said yesterday that the balance of the banking system was still as high as $250 billion, while the overnight and 3-month interbank rate was still low and there was no indication of any flow of funds.　　He acknowledged that there had been a rise in the number of bankruptcies in Hong Kong, but that there had been no significant increase in the bad debts and that, despite the sharp rise in bad debts at the end of last year, the firm had now stabilised. According to the big public network, Hkab said the U.S. economic data is still uneven, although the property market has partially improved, but unemployment and industrial production and other data are not ideal. He pointed out that the market has not recovered, so I believe that the U.S. interest rate increase this year is not a big chance. On the Hong Kong side, the unemployment rate has stabilized after a 8-month rise, but exports are still declining and retail sales figures remain weak.　　As for the buoyant property market, he said that the supply of flats, coupled with a near-zero interest rate and a record low, had a very natural property market, but there was not much room for further downward mortgage rates. U.S. President Barack Obama's move to tighten regulation of financial institutions and the Fed will be an international trend. Hkab said the regulatory authorities had tightened approvals for investment products since the Lehman incident, with banks reflecting the approval period of 9 months.　　He hoped that the regulatory authorities would strike a balance between efficiency and risk management in their approval of investment products and that the Hkab would set up a group to allow the industry to discuss new regulations. As for the proposal of the Hong Kong Deposit Protection Board to optimize the existing DPS, the deposit protection scheme will be increased to $500,000 and the ratio of bank contribution levy should be halved. However, it was reported earlier that banks did not consider the reduction to be sufficient to offset the impact of increased coverage on costs.　　Hkab said that banks are very supportive of increasing customer deposit protection, but they have reservations about premiums, and they do not want to raise the premiums significantly, but to pass on the cost to customers. Asked why there was disagreement over the premium level, he explained that since the HKMA had started the study, it had taken all the banks together to calculate the premium costs, so that the respective assessments would be different from those of the banks. He added that discussions were being held with the HKMA in the hope that concessions would be made to the premium level and that the HKAB would submit representations to the Deposit Protection Board before June 26, the end of the consultation period.