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HKMA defends universal banking model

Norman Chan, chief executive of the HKMA, says it is vital to protect consumers and also safeguard cross-border flows, in his opening keynote speech at the Asian Banker Summit 2011.

April 15, 2011 | Norman Chan

Welcome Speech – The Asian Banker Summit 2011

Distinguished guests, ladies and gentlemen,

I am very pleased to address this important conference this morning as it provides a timely occasion for us to take stock of what is happening to our banking industry at a time when the international financial markets are recovering from the Global Financial Crisis.  Indeed, the landscape of banking has undergone very significant changes since the eruption of the crisis in 2008.  And more changes are in store.  Some might even argue that banking will evolve beyond recognition when compared with what we knew previously.  Of course the international banking reform package, ranging from the new capital, liquidity and leverage regime under Basel III, the treatment of Global Systemically Important Financial Institutions to the use of macro-prudential tools etc, will have different implications for different banks and different jurisdictions.  It is not my intention to discuss today the new international standards that have been and are about to be adopted as these standards have been talked about very frequently amongst bankers and regulators.  What I would like to do here is to share with you our views on the following three issues that have profound impact on the way in which the banking industry, including that in Hong Kong, should structure itself:

  • Universal Banking vs. Segregated Banking
  • Universal Banking vs. Narrow Banking
  • Branch vs. Subsidiary Operations

Universal Banking vs. Segregated Banking

First let me talk about "universal banking", which may mean different things to different people.  By "universal banking" I refer to a business model in which banks are allowed to provide a wide range of banking and other financial services to th...

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Risk And Regulation Working Group