Topic Deposit Insurance. The Mission of DPS Maintain an effective and efficient Deposit Protection...
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Transcript of Topic Deposit Insurance. The Mission of DPS Maintain an effective and efficient Deposit Protection...
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Topic
Deposit Insurance
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The Mission of DPS
Maintain an effective and efficient Deposit Protection Scheme
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The Development of DPS I991 Subsequent bank runs + Bank of Credit and
Commerce International (BCCI) Crisis
1992 : Public consultation Reject
1997: Asian financial crisis Conc
ern in banking system
1998 : HKMA recommend
commissioned a consultancy study
October2000 consultation paper was issued
for public consultation
April 2001 Chief Executive in Council
approved
May 2004 Enactment of the DPS
Ordinance
July 2004 The Hong Kong Deposit
Protection Broad was formed
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Objectives Providing a measure of protection to
depositors Contributing to the stability of the banking
system Prevent withdrawal of funds from a bank
will led to a bank failure Minimize the likelihood of a bank failure
caused by rumor provide an orderly means of compensating
depositors
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Countries with Explicit ,Limited Deposit Insurance Systems
Deposit insurance is a measure taken bybanks in many countries to protect theirclients’ savings
Africa(4) Asia(10) Europe(32) Middle East(4) Western Hemisphere (17)
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FDIC in USA
The Federal Deposit Insurance Corporation
United States government corporation
Glass-Steagall Act of 1933
Provides deposit insurance up to $100,000 per depositor
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FDIC in USA
Types of accounts covered
Checking accounts, Negotiable Order of Withdraw, MMDAs
Savings accounts Money market account Certificates of deposit (CDs)
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FDIC in USA
Types of accounts not covered
Investments such as US Treasury securities
Stocks, bonds, mutual funds and money markets funds
Losses due to theft or fraud Errors made in your accounts
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The graph displays both the number of commercial banks and the number of savings institutions as of June 30 of the current year and each of the previous 15 years.
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The chart depicts total assets (expressed in $Billions) of commercial banks and savings institutions as of June 30 of the current year and each of the previous 15 years.
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Comments
problems of moral hazard CAMEL ratings (Capital adequacy) 、 (Asset quality) 、 (Management) 、 (Earnings) 、(Liquidity) rewarded for having strong management and good asset quality
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moral hazards for insurance can't be eliminated, but can be minimized
Coinsurance attractive conditions and encourage those
depositors including small, large depositors, debtors
Enforce it clearly Let depositors know how the system works Increase system transparency
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Assets in banks : liquid assets and inestimable loans
When most depositors request to pay cash, the banking system may go into a fragile stage.
Public know the system clearly, such as interests ,principal
Definition among all banks should be the same
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Adverse selection regulate all banks should par
ticipate mandatory
2006 年中期報告Customer loan Customer deposit
Hang Seng $2,665,050,000.00 4,480,970,000.00
Dah Sing 48,540,085,000.00 58,259,426,000.00
Hang Seng 54 %
Dah Sing 83%
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FDIC in USA Almost 100% of bank deposits are
insured and only 3 % of US deposit-taking institutions are not member.
Membership of the scheme is part of marketing strategy
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DPS in HK Quality of bank management and
regulations Depositors money is not put in to
danger stage government
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Group 7
Chung Chun Kwong ,043128 Chung Wing Leung, 043137 Kwong Tik Man, 043147 Ngan Yee Kwan, 043157