Banking Ordinance
Encyclopedia
Banking Ordinance are a set of laws passed by the Legislative Council of Hong Kong
to tighten restrictions for opening up or licensing a bank. Prior to the 1964 re-regulations, the government had no way to control bank's monetary effect on the economy. It also had no way of protecting the people utilizing the institutions. Banking was considered a Laissez-faire
network, and was also described as "Free Banking" or "Wildcat Banking" filled with much uncertainty.
$5,000 license fee was required one-time. Afterwards, a bank could theoretically open on zero capital.
. A minimum capital of HKD
$5 million and liquidity ratio of 25% and limitation on loans and investments became the new requirements to open a legit institution.
was imposed on new bank licenses.
was established in 1981 as a network tag for banks that follow the ordinance rules.
Legislative Council of Hong Kong
The Legislative Council is the unicameral legislature of Hong Kong.-History:The Legislative Council of Hong Kong was set up in 1843 as a colonial legislature under British rule...
to tighten restrictions for opening up or licensing a bank. Prior to the 1964 re-regulations, the government had no way to control bank's monetary effect on the economy. It also had no way of protecting the people utilizing the institutions. Banking was considered a Laissez-faire
Laissez-faire
In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies....
network, and was also described as "Free Banking" or "Wildcat Banking" filled with much uncertainty.
Banking Ordinance of 1948
The first law passed. It provided for the licensing of banks, examination of bank books, publication of bank statements and the appointment of an advisory committee. A Hong Kong dollarHong Kong dollar
The Hong Kong dollar is the currency of the jurisdiction. It is the eighth most traded currency in the world. In English, it is normally abbreviated with the dollar sign $, or alternatively HK$ to distinguish it from other dollar-denominated currencies...
$5,000 license fee was required one-time. Afterwards, a bank could theoretically open on zero capital.
Banking Ordinance of 1964
The law was passed on October 16, 1964 and advised by a group of senior officials from the Bank of EnglandBank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
. A minimum capital of HKD
Hong Kong dollar
The Hong Kong dollar is the currency of the jurisdiction. It is the eighth most traded currency in the world. In English, it is normally abbreviated with the dollar sign $, or alternatively HK$ to distinguish it from other dollar-denominated currencies...
$5 million and liquidity ratio of 25% and limitation on loans and investments became the new requirements to open a legit institution.
Banking Ordinance of 1967
The law was passed in response to a banking crisis in which a few banks experienced liquidity problems and 18 acquisitions by larger banks were recorded. The revised law set the new minimum capital to HKD $10 million. A debt moratoriumDebt moratorium
A debt moratorium is a delay in the payment of debts or obligations. The term is generally used to refer to acts by national governments. A moratory law is usually passed in some special period of political or commercial stress; for instance, on several occasions during the Franco-Prussian War,...
was imposed on new bank licenses.
Hong Kong Association of Banks
The Hong Kong Association of BanksHong Kong Association of Banks
The Hong Kong Association of Banks is an association created based on a series of Bank Ordinances enacted since 1948. In 1981 the association was established and replaced the Exchange Bank Association...
was established in 1981 as a network tag for banks that follow the ordinance rules.