Exiting from the temporary measures introduced in last year's global financial crisis requires careful planning and co-ordination, Monetary Authority Chief Executive Joseph Yam says.

In his latest Viewpoint article on the authority's website, Mr Yam said the 100% deposit guarantee has been effective in boosting depositors' confidence. Exiting from the measure is a delicate and complicated issue.

The authority has started work on modifying the Deposit Protection Scheme and plans to introduce a bill early next year to amend the law.

"I hope the legislative process will be smooth to allow time for a publicity programme next year to ensure the community is fully informed about the new arrangements well before the deposit guarantee lapses at the end of 2010." 

Singapore and Malaysia also introduced similar deposit guarantees last summer, also with a commitment to exit from them at the end of 2010. There is, therefore, a need for close co-ordination with these two jurisdictions, he added.

At the Executives' Meeting of East Asia-Pacific Central Banks governors' meeting held in Hong Kong last month, the two countries' central bank governors agreed to establish a tripartite working group to co-ordinate a strategy to make the exit at the end of 2010 as smooth as possible.