Discussion
The Administration briefed members on the Banking (Amendment) Bill 2017 (“the Bill”). The Bills Committee deliberated (index of proceedings in Appendix).
The Bills Committee requested the Administration to provide the following information:
(a) sample(s) of recovery plan setting out the measures that the authorized institutions (“AIs”), in particular the medium-sized banks, would take to stabilize and restore their financial resources and viability under severe stress;
(b) the penalties for committing an offence relating to recovery planning for AIs in Hong Kong vis-à-vis those in other jurisdictions, including the United Kingdom, Australia and Singapore; as well as vis-à-vis the penalties under legislation regulating other financial institutions in Hong Kong, such as the insurance companies and the approved trustees of the Mandatory Provident Fund schemes;
(c) whether the Monetary Authority (“MA”) would consider issuing letters to directors of AIs (including independent non-executive directors) direct under certain circumstances to ensure that they had been notified of the important requirements or instructions issued by MA, such as the recovery planning requirements;
(d) whether there were any requirements/restrictions imposed on directors or persons who were responsible for implementing the recovery plan (in particular in relation to the resignation of directors or other responsible officers) for AIs in order to protect the interests of the public and other stakeholders;
(e) whether the recovery plan mandated major shareholders of AIs to any commitments (e.g. prior agreement/undertaking on capital injection by shareholders) under severe stress;
(f) what technical comments had been given by the banking industry during consultation on MA’s proposals for the implementation of the new Basel Committee on Banking Supervision exposure limits framework and recovery planning requirements; and what corresponding actions had been taken by MA; and
(g) whether the recovery plan for AIs would include measures which would adversely affect the general public, such as call loan arrangements or reduction in the debts of AIs under severe stress.
Invitation of views
Members agreed to receive views from the banking industry and relevant stakeholders on the Bill at the next meeting.
There being no other business, the meeting ended at 10:00 am