RDP 9506: The Liberalisation and Integration of Domestic Financial Markets in Western Pacific Economies Appendix 1: Summary of Deregulation in Banking and in Deposit and Loan Markets
September 1995
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| Date | Banking sector | Deposit market | Loan market |
|---|---|---|---|
| February 1972 | maximum interest rate on overdrafts and housing loans over A$50,000 removed | ||
| January 1975 | banks' agreement to maintain uniform fee structure discontinued since it was contrary to Trade Practices Act | ||
| February 1976 | limit extended to A$ 100,000 | ||
| December 1980 | interest rate ceilings on all bank deposits removed | ||
| June 1982 | Reserve Bank of Australia ceased quantitative lending guidance | ||
| August 1984 | all remaining controls on deposits (terms and conditions) removed | ||
| February 1985 | entry of 16 foreign banks | ||
| April 1985 | remaining ceilings on interest rates removed, except for owner-occupied housing loans under A$ 100,000 | ||
| April 1986 | interest rate ceiling on new owner-occupied housing loans removed, existing loans still subject to maximum rate of 13.5 per cent | ||
| February 1992 | further entry by foreign banks approved | ||
| February 1992 to June 1994 | foreign banks have the choice of operating as branch or locally incorporated subsidiary; foreign bank branches not allowed to conduct retail banking business | ||
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Source: Battellino and McMillan (1989), Reserve Bank of Australia (1994), Annual Report. |
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| Date | Banking sector | Deposit market | Loan market |
|---|---|---|---|
| July 1981 | banks required to observe rates set by the Hong Kong Association of Banks (HKAB) which sets the maximum interest rate payable on deposits up to HK$500,000 with a maturity less than 15 months | banks required to observe rates set by HKAB which sets the prime lending rate | |
| March 1989 | 3-tier system of banking introduced, comprising licensed banks (LBs), restricted licensed banks (RLBs or merchant banks) and deposit-taking companies (DTCs). (Only licensed banks are required to follow rates set by the HKAB but RLBs and DTCs are subject to minimum deposit requirements and DTCs are excluded from taking short-term deposits.) | ||
| October 1994 | interest rates on deposits fixed for more than 1 month liberalised | ||
| January 1995 | interest rates on deposits fixed for more than 7 days liberalised | ||
| April 1995 | interest rates on deposits fixed for more than 24 hours on call liberalised | ||
| second half of 1995 | interest rates on deposits fixed for more 24 hours to be liberalised | ||
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Source: Ho (1991); Hong Kong Monetary Authority (1994), Quarterly Bulletin, November. |
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| Date | Banking sector | Deposit market | Loan market |
|---|---|---|---|
| April 1974 | stabilisation package including continued regulation of state bank deposit interest rates | stabilisation package including introduction of credit ceilings for all banks; continued regulation of state bank lending interest rates; extension of provision of liquidity credits to state banks and of direct credits to priority sectors | |
| June 1983 | removal of interest rate ceilings on time deposits by state banks (but banks entered into an agreement of understanding to avoid ‘undue competition’) | removal of interest rate ceilings on loans by state banks (and introduction of money market instruments); abolition of credit ceilings; reduction in liquidity credits to state banks and direct credit credits to priority sectors; priority shifts to non-oil exports | |
| October 1988 | prudential system overhauled; foreign banks allowed access to Tabanas and Taska rupiah savings schemes; entry and branch establishment requirements eased for domestic and foreign banks; restrictions on ATMs and mobile cash units eased | tax-free status of interest earned on time deposits removed | |
| January 1990 | substantial reduction in scale and scope of liquidity credits | ||
| February 1991 | bank supervision policy overhauled; domestic banks permitted to establish branches overseas; restrictions on bank mergers eased | ||
| 1992 | foreigners allowed to buy up to 49 per cent of publicly listed shares in banks | ||
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Source: Bank Indonesia, Annual Report, various; MacIntyre (1993); APEG (1995). |
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| Date |
Banking sector | Deposit market |
Loan market |
|---|---|---|---|
| April 1972 | long-term prime rate freed and set at 90 basis points above the subscribers' yield on 5 year debentures issued by long-term credit banks | ||
| March 1985 | introduction of money market certificates (MMC), Y50m minimum deposit requirement and period of 1 to 6 months | ||
| October 1985 | interest rates on time deposits of 3 months to 2 years with minimum deposit of Y lb liberalised; minimum deposit requirement on MMCs extended to 1 month to 1 year | ||
| March 1986 | minimum deposit requirement on free time deposits cut to Y500m | ||
| September 1985 | minimum deposit requirement on MMCs cut to Y30m; minimum deposit requirement on free time deposits cut to Y300m | ||
| April 1987 | minimum deposit requirement on MMCs cut to Y20m; minimum deposit requirement on free time deposits cut to Y100m | ||
| October 1987 | minimum deposit requirement on MMCs cut to Y10m; period on free time deposits extended to 1 month to 2 years | ||
| April 1988 | minimum deposit requirement on free time deposits cut to Y50m | ||
| November 1988 | minimum deposit requirement on free time deposits cut to Y20m | ||
| January 1989 | while the maximum short-term prime rate remains set at 15 per cent under the Temporary Interest Rate Adjustment Law, the rate is freed from the ODR and determined by bank funding costs and expenses | ||
| June 1989 | small MMC introduced with minimum deposit requirement of Y3m | ||
| October 1989 | minimum deposit requirement on free time deposits cut to Y10m; MMC merged into large-denomination time deposits | ||
| April 1989 | minimum deposit requirement on small MMC cut to Y1m | ||
| April 1989 | minimum deposit requirement on small MMC cut to Y500,000 | ||
| April 1991 | long-term prime rate set at a spread above short-term prime rate | ||
| November 1991 | minimum deposit requirement on free time deposits cut to Y3m | ||
| June 1992 | minimum deposit requirement on small MMCs abolished | ||
| June 1993 | minimum deposit requirement and period on time deposits abolished; small MMCs merged into time deposits | ||
| October 1994 | interest rates on demand deposits freed (though payment of interest on current deposits remains prohibited) | ||
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Source: Bank of Japan (1994), Quarterly Bulletin, November. |
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| Date | Banking sector | Deposit market | Loan market |
|---|---|---|---|
| June 1981 to 1983 | privatisation of the 4 government-owned commercial banks (taking total of private commercial banks to 5) | ||
| 1981 | lowering of entry barriers to domestic and foreign banks | ||
| December 1982 | maximum ownership of bank by one shareholder set to 8 per cent | ||
| 1980 | elimination of discriminatory tax on NBFI deposit interest | ||
| 1982 | lowering of entry barriers to NBFIs | ||
| 1985 | banks allowed to establish high-yielding savings deposits | ||
| December 1988 | interest rates on time deposits of more than 2 years liberalised | interest rates on loans from banks and NBFIs, other than interest rates on loans subsidised by government, fully liberalised; introduction of a prime rate system; interest rates on money market instruments fully liberalised | |
| 1989 | 3 new commercial banks established | ||
| April 1989 | December 1988 reform reversed | December 1988 reform reversed | |
| October 1990 | facilitation of NBFI conversion to bank status | ||
| July 1991 | restrictions on foreign banks eased considerably, covering branching, limits on capital, access to local funding and participation in trust business | ||
| November 1991 | rates on deposits >3 years liberalised | short-term rates on bank overdraft loans, commercial and trade bill discounts liberalised | |
| November 1993 | rates on deposits >2 years liberalised | rates on all bank lending (excluding loans financed by the official sector) liberalised; export financing incentives and government-directed funds for capital investment, housing funds and agricultural funds remain | |
| November 1994 | rates on deposits >1 years liberalised | ||
| 1995 | plan to free all lending rates | ||
| 1996 | plan to liberalise rates on all deposits except demand deposits, introduce products linked to money market rates | ||
| 1997 | plan to set up plan to deregulate demand deposits | ||
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Source: Lee (1992), Bank of Korea (1994). |
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| Date | Banking sector | Deposit market | Loan market |
|---|---|---|---|
| October 1978 | commercial banks allowed to set interest rates on deposits 1 year or less | commercial banks allowed to set base lending rates (BLR) under guidance of Bank Negara Malaysia | |
| March 1983 | bank lending rates pegged to banks' declared BLR | ||
| October 1985 | pegged interest rate agreement whereby rates on deposits 1 year or less are aligned to 2 lead banks' rates | ||
| February 1987 | pegged interest rate agreement disbanded | ||
| 1987 | margin of lending rates over BLR restricted to 4 percentage points | ||
| February 1991 | note: controls on entry of foreign banks and establishment of new banks remain; domestic bank branch numbers not controlled but foreign bank branch numbers are | BLR freed from Bank Negara Malaysia's administrative control | |
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Source: Bank Negara Malaysia, Quarterly Bulletin, various; Abidin (1986). |
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| Date |
Banking sector |
Deposit market | Loan market |
|---|---|---|---|
| July 1981 | interest rate ceilings removed | interest rate ceilings removed except on loans for up to 1 year | |
| January 1983 | interest rate ceiling on loans up to one year removed | ||
| early 1980s | 25% of loanable funds directed to agriculture and agrarian reform credits | ||
| November 1985 | major reduction in subsidy element of central bank refinancing; interest rate ceilings removed | ||
| 1989 | lifting of moratorium on the establishment of new banks | ||
| April/May 1991 | bank branching and ATM restrictions liberalised | 5–10% of loanable funds directed to small and medium cottage enterprises | |
| June 1993 | restructuring of the central bank | ||
| May 1994 | foreign bank entry allowed (as a full branch, as a local subsidiary or by acquisition of an existing domestic institution). 10 foreign banks granted full branch status | ||
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Source: Bangko Sentral ng Pilipinas, Annual Report, various; Hutchcroft (1993). |
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| Date | Banking sector | Deposit market | Loan market |
|---|---|---|---|
| July 1975 | domestic interest rate cartel abolished, all banks free to quote their own interest rates | domestic interest rate cartel abolished, all banks free to quote their own interest rates | |
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Source: Monetary Authority of Singapore, Annual Report, various; APEG (1995). |
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| Date | Banking sector | Deposit market | Loan market |
|---|---|---|---|
| 1975 | Central Bank of China authorises the Interest Rate Committee of the Banks' Association to set the ceiling and floor of lending rates | ||
| November 1980 | prescribed interest rate band widened; interest rates on bank debentures, NCDs, FX deposits and interbank call loans liberalised | ||
| December 1983 | offshore banking allowed | ||
| April 1984 | banks allowed to increase branches by 3 each year (up from 2 each year) | ||
| March 1985 | 10 large local banks free to set prime rate according to market pressures and customers' credit rating but within the prescribed band | ||
| September 1985 | prime rate system available to all banks | ||
| November 1985 | Interest Rate Control Statute abolished, giving financial institutions more autonomy in setting interest rates | ||
| January 1986 | categories of deposits simplified from 13 to 4; interest rate floor abolished | ||
| 1986–1987 | restrictions on foreign bank business, NT$ financing and branches moderately eased | ||
| 1987 | decontrol of foreign exchange outflow, reducing the privilege of foreign banks to import cheap capital | ||
| July 1989 | ceiling on interest rates removed | band on interest rates removed | |
| July 1989 | lifting of ban on establishment of private banks (new banks limited to 5 branches, not allowed to deal in foreign exchange and, for the first three years of operation, securities) | ||
| 1989–1993 | privatisation of state-owned commercial banks announced | ||
| 1994 | non-residents allowed to open NT$ accounts | ||
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Source: Chen (1990), Yang (1991), Cheng (1993), Asia-Pacific Economic Group (1995). |
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| Date | Banking sector | Deposit market | Loan market |
|---|---|---|---|
| 1983 | 18 per cent ceiling on growth in commercial bank private credit imposed | ||
| 1984 | ceiling on commercial bank credit growth abolished | ||
| 1985 | Bank of Thailand to conduct on-site bank examinations, remove bank directors and officers, restrict transactions between directors and their banks, and bring action against shareholders | ||
| June 1989 | interest rate ceiling on fixed deposits >1 year removed | ||
| March 1990 | interest rate ceiling on fixed deposits <1 year removed | ||
| early 1992 | as part of the goal of universal banking, banks permitted to underwrite public securities and provide financial consultation and information services | ||
| January 1992 | interest rate ceiling on savings deposits removed | ||
| June 1992 | interest rate ceiling on loans by banks, finance companies and credit fonciers removed (except for housing loans to low income earners) but some lending restrictions remain | ||
| April/May 1986 | issue 5 new bank licences to foreign banks and 20 new offshore banking licences; allow foreign banks to open 2 new branches (1 outside Bangkok) | ||
| January 1993 | banks required to maintain BIS ascetand liability ratios | ||
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Source: Wibulswasdi and Tanvanich (1992); Doner and Unger (1993); Kirakul, Jantarangs and Chantanahom (1993). |
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