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Law Relating to Banking in Hong Kong

Law Relating to Banking in Hong Kong

Derek Roebuck
S. H. Ko
Philip Lawton
S.W. Leung
Dhirendra K. Srivastava
Peter Tashjian
Copyright Date: 1994
Pages: 340
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  • Book Info
    Law Relating to Banking in Hong Kong
    Book Description:

    Produced in collaboration with the Chartered Institute of Bankers Hong Kong Centre, this book is indispensable to students sitting for the institute's examination from September 1992 onwards, and to anyone involved in the banking industry in Hong Kong. Banking regulations and the law on securities, negotiable instruments, business associations, and insolvency are discussed.

    eISBN: 978-988-220-196-5
    Subjects: Law

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-viii)
  3. The Authors
    (pp. ix-x)
  4. Preface to the Second Edition
    (pp. xi-xii)
    Derek Roebuck
  5. Preface to the First Edition
    (pp. xiii-xiv)
    Derek Roebuck
  6. Chapter 1 Banking and the Law in Hong Kong
    (pp. 1-8)

    All the law of Hong Kong has some relevance for banks, though some parts are more important than others.

    Perhaps the most important body of general principle is the law of contract. Banks make contracts, many thousands every day, which are governed by those principles. They are explained for the beginner in Carole Chui and Derek Roebuck Hong Kong Contracts Hong Kong University Press 2nd edition 1991, pp 2–3:

    People in business need to depend on others doing what they have undertaken to do and on the state either forcing them to do it if they refuse or making...

  7. Chapter 2 Negotiable Instruments
    (pp. 9-74)

    The meaning of ‘instrument’ The word ‘instrument’ has a technical meaning in this part of the law. It means a document with a special purpose: to show who owns money and how that money is intended to be transferred. Moreover, it must be distinguished from a deed, which is a document under seal. What makes an instrument work is one or more signatures on it. In the technical words of the law it is ‘an instrument under hand which is a document of title to money’. ‘Under hand’ is legal jargon for signed but not sealed ‘under seal’. The purpose...

  8. Chapter 3 Agency
    (pp. 75-106)

    The primary duty of an agent is to make contracts for a principal and deal with the principal’s property. An agent can do what a principal can do. Persons such as auctioneers, brokers, bankers, barristers, solicitors, commission agents, company directors, real estate agents, partners and spouses and other family members often act as agents. The categories of agents however are never closed.

    Agency is a triangular relationship between principal, agent and third party. Its essential characteristic is that it gives the agent the power to affect the legal relations of the principal with third parties.

    The modern law of agency...

  9. Chapter 4 Partnership
    (pp. 107-138)

    Traders and merchants have always combined their resources and efforts to achieve greater efficiency and higher profits. The simplest form of such association is the partnership. The limited liability company, dealt with in the next chapter, is a later and more complex development. Both partnerships and limited companies are sometimes called simply ‘companies’ and many a partnership’s name is the surname of one or more partners, followed by ‘and Company’. A partnership is also called a ‘firm’ and the name it chooses to carry on its business under is called the firm name, Partnership Ordinance s6. The best way to...

  10. Chapter 5 Companies
    (pp. 139-194)

    As explained in Chapter 3, a business can be conducted by an individual as a sole trader, or in a partnership, or through the medium of a body corporate. The legal position of the partnership and of the partners was described in Chapter 4. This chapter deals with registered companies, one kind of corporate body. A corporate body is a separate entity, created by law to exist perpetually until some legal process ends it, such as liquidation or merger.

    The nature of a corporate body The essence of corporate law is that it is concerned with the rules for the...

  11. Chapter 6 Securities
    (pp. 195-248)

    The state compels debtors to pay their debts. If necessary, the debtor’s property will be sold and the proceeds used to pay the debt or satisfy a judgement for damages for its non-payment. But it is the debtor’s general property that is available, and the creditor cannot stop that property being dissipated or reduced in value. Moreover, the principle of equal treatment of unsecured creditors means that no differences in the cause of the debts, nor the time when they were incurred, nor in their amount, will allow one creditor to be preferred to another. For these reasons, creditors try...

  12. Chapter 7 Insolvency
    (pp. 249-278)

    Insolvency is the inability to pay debts as they fall due. The reason for that inability is not important in determining whether one is insolvent. Insolvency may force debtors into compromises and arrangements with creditors, or may lead to the liquidation of corporations, or to the bankruptcy of individuals and partnerships.

    Contrary to common usage and understanding, being insolvent does not mean that one is bankrupt, poverty stricken, or even unable to pay one’s debts. Insolvency depends on inability to pay debts as they fall due. Even a debtor with a positive net worth may be found insolvent. Where money...

  13. Chapter 8 Banking Regulation
    (pp. 279-306)

    Between 1841 and 1948, banking law and practice in Hong Kong evolved from English Common Law and banking practice. This law and practice, which did not originate locally, nevertheless had lasting effects on practices here, especially in the relationship between bank and customer in contract and tort. Throughout this period, there was no legislation for the regulation of banking, in either Hong Kong or England.

    The lack of banking legislation in Hong Kong should not be interpreted as a sign of financial stability. Hong Kong suffered its first banking crisis in 1866, when six of the eleven banks operating in...

  14. Chapter 9 The Collapse of BCCHK
    (pp. 307-320)

    Hong Kong’s system of regulating banks failed in July 1991, when the Bank of Credit and Commerce Hong Kong (BCCHK) closed its doors and ceased trading. The bank had 40,000 depositors with HK$10.85 billion in deposits. Newspapers reported that depositors broke down and wept. Some went on hunger strike; others organized protest marches. Queues of angry and nervous depositors demanded the immediate withdrawal of their funds. There were runs on four other banks, including Standard Chartered and Citibank. Fears of a territory-wide run sent the Hang Seng Index plummeting. The Government moved swiftly, injecting $60 million into the banking system....

  15. Chapter 10 Conclusive Evidence Clauses, Bank Statements and Banking Today
    (pp. 321-334)

    In Chapter 2 mention was made of the introduction of new clauses intended to protect banks, particularly in relation to mistakes in account statements, 2.2. This chapter deals in greater depth with this recent development.

    Customers are now required to check their statements and report any errors, discrepancies or unauthorized debits within the prescribed notice period. The Hongkong Bank and many others wrote to their customers under the caption Changes in General Terms and Conditions informing them of the new terms and conditions, which provide that where a bank statement is sent to a customer who does not raise any...

  16. Table of Legislation (With Abbreviations)
    (pp. 335-336)
  17. Table of Cases
    (pp. 337-344)
  18. Index
    (pp. 345-354)