Hong Kong proposes widening safety net for bank depositors by 60 per cent to US$102,560

Confidence-building measure unrelated to collapse at Silicon Valley Bank and First Republic Bank, but the part of ‘our regular review’, Hong Kong Deposit Protection Board chairman says

New cap is in line with international standards and gives sufficient protection to depositors while ‘not adding too high a cost’: CEO

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The Hong Kong Deposit Protection Board’s first increase in 12 years comes after the collapse of US lenders such as Silicon Valley Bank and First Republic Bank. Photo: EPA-EFE

Published: 12:45pm, 13 Jul 2023Updated: 6:10pm, 13 Jul 2023

Hong Kong has proposed widening a safety net for the city’s bank depositors in case of a bank failure to HK$800,000 (US$102,560) per depositor, according to proposals made by a government agency on Thursday.

The deposit protection scheme is funded by banks. It was launched in 2006 and initially offered depositors up to HK$100,000 in deposit protection, before this was increased to HK$500,000 in 2011.

The Hong Kong Deposit Protection Board’s first increase in 12 years comes after the collapse of US lenders such as Silicon Valley Bank and First Republic Bank, which put the issue of deposits under a spotlight this year.

The confidence-building measures, however, are not the “result of the US bank incidents, but our regular review to enhance the system”, Connie Lau Yin-hing, chairman of the board, said in a media briefing.

“But we have also taken into consideration international developments,” she said.