Budget Speech

Adjusting Exceptional Measures

18.      Since 2008, the Government has implemented a number of measures under the strategy of “stabilising the financial system, supporting enterprises and preserving employment”. These exceptional measures were designed to counter the financial tsunami and would not be adopted lightly in normal circumstances. They should not and cannot be sustained over a long period of time, lest they impose a heavy burden on public finances and undermine market operation. Governments around the world are now making plans to exit from their exceptional measures. Some have already begun to progressively execute these plans. We should also prepare to adjust our exceptional measures at a suitable time.

19.      In respect of the support measures for enterprises, I announced in October 2009 that the application period for the Special Loan Guarantee Scheme would be extended to end-June 2010 to counter the credit crunch triggered by the global financial crisis. So far, loans worth more than $68 billion have been approved by banks, benefiting over 16 000 enterprises and indirectly preserving jobs for 280 000 or so employees. I will closely monitor the pace of our economic recovery over the next few months and consider when to let the credit market resume normal operation.

20.      On financial measures, the full deposit guarantee will remain in force until the end of this year. At the Asia Pacific Economic Cooperation Finance Ministers' Meeting last year, I discussed the issue of exit strategies with finance ministers in the region. The Hong Kong Monetary Authority (HKMA) has also established a tripartite working group with its counterparts in Singapore and Malaysia to work out suitable arrangements to exit from the deposit guarantee regimes. The HKMA and I will continue to communicate and co-ordinate with the other governments, with the common objective of minimising the impact of exiting from the deposit guarantee on the economy and the banking system. We have also completed a review on the existing Deposit Protection Scheme. We will introduce a bill in the current legislative year to ensure that, upon expiry of the full deposit guarantee, the public can benefit from a more suitable protection scheme.

Content | Next Page