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IMF Country Report No. 21/119
PEOPLE’S REPUBLIC OF CHINA– HONG KONG SPECIAL ADMINISTRATIVE REGION
FINANCIAL SECTOR ASSESSMENT PROGRAM
TECHNICAL NOTE—FINANCIAL SAFETY NET AND CRISIS MANAGEMENT ARRANGEMENTS
June 2021
This Technical Note on Financial Safety Net and Crisis Management Arrangements for the People’s Republic of China–Hong Kong Special Administrative Region FSAP was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed in June 2021.
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Title page
PEOPLE’S REPUBLIC OF CHINA―HONG KONG SPECIAL ADMINISTRATIVE REGION
FINANCIAL SECTOR ASSESSMENT PROGRAM
TECHNICAL NOTE
FINANCIAL SAFETY NET AND CRISIS MANAGEMENT ARRANGEMENTS
June 7, 2021
Prepared By
Monetary and Capital Markets Department
This Technical Note was prepared by IMF staff in the context of the Financial Sector Assessment Program in the People’s Republic of China – Hong Kong Special Administrative Region, led by Ananthakrishnan Prasad. It contains technical analysis and detailed information underpinning the FSAP’s findings and recommendations. Further information on the FSAP can be found at http://www.imf.org/external/np/fsap/fssa.aspx
Contents
Glossary
EXECUTIVE SUMMARY
INTRODUCTION
INSTITUTIONAL FRAMEWORK
EARLY INTERVENTION AND RECOVERY PLANNING
RESOLUTION POWERS AND PLANNING
A. Resolution Powers and Policies
B. Resolution Planning
RESOLUTION FUNDING AND EMERGENCY LIQUIDITY ASSISTANCE
DEPOSITOR PROTECTION
BOX
1. Different Forms of Deposit Preference
TABLES
1. Main Recommendations
2. Summary of Resolution Planning Status for Hong Kong SAR Banks
ANNEX
I. Progress Against 2014 FSAP Recommendations on Crisis Management and Bank Resolution
Glossary
| AI | Authorized Institutions |
| CFR | Council of Financial Regulators |
| CMCG | Crisis Management Coordination Group |
| CMF | Crisis Management Framework |
| CMG | Crisis Management Group |
| DPB | Deposit Protection Board |
| DPS | Deposit Protection Scheme |
| D-SIB | Domestic Systemically Important Bank |
| FIRO | Financial Institutions (Resolution) Ordinance |
| FS | Financial Secretary |
| FSB | Financial Stability Board |
| FSBCC | Financial Services Branch Coordination Centre |
| FSC | Financial Stability Committee |
| FSTB | Financial Services and Treasury Bureau |
| G-SIB | Global Systemically Important Bank |
| G-SII | Global Systemically Important Insurer |
| HKD | Hong Kong Dollar |
| HKMA | Hong Kong Monetary Authority |
| IA | Insurance Authority |
| IADI | International Association of Deposit Insurers |
| LAC | Loss Absorbing Capacity |
| LRA | Lead Resolution Authority |
| MA | Monetary Authority (the head of the HKMA) |
| RA | Resolution Authority |
| RO | Resolution Office of the HKMA |
| RCH | Recognized Clearing House |
| SFC | Securities and Futures Commission |
| SFST | Secretary for Financial Services and the Treasury |