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Hong Kong savings safety net to expand by 60% to protect US$102,270 in event of bank failures
- The Hong Kong Deposit Protection Board aims to have the change implemented by the fourth quarter of this year
- Protection level will be in line with UK and Germany, higher than mainland China and Singapore, lower than the United States
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Hongkongers will soon enjoy protection for up to HK$800,000 (US$102,270) of bank deposits, up from the current HK$500,000, as a government body has decided to move ahead with expanding the safety net that guards citizens savings in the event of a bank failure.
The Hong Kong Deposit Protection Board, which first suggested raising the protection level in July, aims to have the change implemented by the fourth quarter of this year, it said in a media briefing on Tuesday.
“The proposed enhancements are crucial to ensuring that the Deposit Protection Scheme (DPS) keeps up with the international best practice and remains effective in contributing to banking stability as intended,” Connie Lau Yin-hing, chairman of the board, said at the briefing.
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The 60 per cent increase is the first in some 13 years and comes after the collapse of US lenders such as Silicon Valley Bank and First Republic Bank, which put the issue under a spotlight last year. Following the proposed increase, Hong Kong’s deposit protection scheme will be similar to those in the United Kingdom, Germany and Ireland. It will be higher than mainland China’s 500,000 yuan (US$69,814) and Singapore’s S$75,000 (US$55,790) safety nets, but lower than the US$250,000 offered in the United States.
The decision to move forward with the increase follows a three-month review and consultation period with the general public and the banking community.
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