Lobby group calls for setting up of deposit protection system

Friday, October 10, 2008
Issue 492, Page 6
Word count: 355
Published in: Macau Daily Times

By Poyi (Natalie) Leung

The New Macau Association handed a petition letter to the government headquarters yesterday urging the setting up of a government-led system in a bid to provide some level of protection for residents’ bank savings under the current global financial crisis.

According to vice president of the opposition group, Patrick Chu Kuok Kum, a deposit security was “the most fundamental demand” for the general public when impacts of the financial crisis were spread globally.

Also, Mr Chu said the recent rumour that two local banks had been declared bankrupt and aroused panic in society “exposed the urgency of introducing such a system” so that the public would not be “so vulnerable to fabrication and external financial fluctuations”.

The petition letter, which was addressed to Chief Executive Edmund Ho Hau Wah and Secretary for Economy and Finance, Francis Tam Pak Yuen, proposed that the government should “initiate dialogue with industries immediately and establish a government-led deposit protection system which nets all banks operating in Macau and sets a compensation cap of 80 percent of deposits.

Mr Chu said Macau was already “very much lagging behind” other developed financial bodies, adding if a deposit protection system that had a protection level of 100,000 patacas to 200,000 patacas, “small account holders won’t be too worried while big account holders can deposit their savings in more than one bank”.

Facing the global financial turmoil, Mr Chu said Hong Kong was reviewing its deposit protection system in order to lift the protection level from HK$100,000 to HK$200,000.

Of the US bailout package, one of the measures was to raise the deposit protection limit from US$100,000 to US$250,000, he said, adding that 27 countries of the European Union had already decided to increase the cap from 20,000 euros to 50,000 euros.

Also, Germany, Austria, Denmark, Ireland and Greece’s deposit protection systems have already offered no upper limit protection level.

As the Macau SAR adopted the free economic system, Mr Chu said it was “inevitable” that society would be affected by international financial risks.

However, he said the administration remained “unresponsive” in starting to set up such a protection system “despite lawmakers’ interpellations”.

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