The Banking Ordinance is a set of laws passed by the

Legislative Council of Hong Kong The Legislative Council of the Hong Kong Special Administrative Region (LegCo) is the unicameral legislature of Hong Kong. It sits under China's " one country, two systems" constitutional arrangement, and is the power centre of Hong Ko ...

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'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups ...

network, and was also described as "Free Banking" or "Wildcat Banking" filled with much uncertainty.

History

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.Jao YC.

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(2001). The Asian Financial Crisis and the Ordeal of Hong Kong. Quorum, Greenwood. A

Hong Kong dollar The Hong Kong dollar (, sign: HK$; code: HKD) is the official currency of the Hong Kong Special Administrative Region. It is subdivided into 100 cents or 1000 mils. The Hong Kong Monetary Authority is the monetary authority of Hong Kong ...

$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 16 October 1964 and advised by a group of senior officials from the Bank of England. A minimum capital of

HKD The Hong Kong dollar (, sign: HK$; code: HKD) is the official currency of the Hong Kong Special Administrative Region. It is subdivided into 100 cents or 1000 mils. The Hong Kong Monetary Authority is the monetary authority of Hong Kong and ...

$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 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. Moratory laws are usually passed at times of special political or commercial stress: for instance, on severa ...

was imposed on new bank licenses.

Hong Kong Association of Banks

The

Hong Kong Association of Banks The Hong Kong Association of Banks (HKAB; Chinese language:香港銀行公會 or 銀公會 in short) is an association created based on a series of Bank Ordinances enacted since 1948. In 1981 the association was established and replaced the Exc ...

was established in 1981 as a network tag for banks that follow the ordinance rules.

Banking Ordinance of 1986

The law is an enhancement to the existing 1967 set. Changes were made to the provisioning of banks, adequacy of capital, control of the management of a bank. It also merged the "Deposit-taking Companies Ordinance" which also required a certain capital before banks can accept deposits.Roebuck, Derek.

994 Year 994 ( CMXCIV) was a common year starting on Monday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * September 15 – Battle of the Orontes: Fatimid forces, under Turkish gener ...

(1994). Law Relating to Banking in Hong Kong. Hong Kong University Press. I SBN 9622093531

References

{{reflist History of Hong Kong 1904 in law 1964 in law 1967 in law 1986 in law Hong Kong legislation Banking in Hong Kong