SINGAPORE, Nov 13 — Hong Kong and Singapore ministers say they will work together to coordinate the exit strategy on measures put in place during the financial crisis.
The two economies plus Malaysia agreed in July to simultaneously withdraw from the full bank deposit guarantee by the end of 2010.
Hong Kong Financial Secretary John Tsang met with Singapore Finance Minister Tharman Shanmugaratnam on Wednesday and exchanged views on their governments’ response to the financial crisis.
According to the Hong Kong government website, Tsang and Tharman reaffirmed it would be premature to withdraw the measures before economic recovery is firmly in place and exit strategies are carefully worked out.
In July, the Hong Kong Monetary Authority, Bank Negara Malaysia and the Monetary Authority of Singapore (MAS) announced the establishment of a tripartite working group to map out a coordinated strategy for the scheduled exit from the full deposit guarantee by the end of 2010 in their respective jurisdictions.
Tsang also briefed Brunei’s Second Finance Minister Pehin Dato Abd Rahman on Hong Kong’s plans to develop a platform for Islamic finance. Brunei expressed an interest in concluding a Comprehensive Avoidance of Double Taxation Agreement with Hong Kong. It is also interested in working out a joint exit strategy for the 100 per cent deposit protection schemes introduced in the region’s economies during the global financial crisis.
Yesterday, Tsang also met Singapore Foreign Minister George Yeo and discussed issues including the state of the global economic recovery and challenges facing the region.
In October last year, the Singapore government decided to guarantee all Singapore dollar and foreign currency deposits of individual and non-bank customers in banks, finance companies and merchant banks licensed by MAS.
The measure, which was taken together with Malaysia, came one week after Hong Kong gave a similar assurance to reassure jittery depositors there and shore up confidence in the banking system.
Ireland was the first European country to guarantee bank deposits, and other European countries had to follow suit on fears that money from all over Europe would otherwise flow to Ireland. — Business Times Singapore
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