The government of Macau Tuesday said it would provide unlimited bank guarantees on deposits in Macau banks, estimated at a total of US$32.5 billion (260 billion patacas), MacauNews reported Wednesday.
Macau’s Secretary for the Economy and Finance, Francis Tam said at a press conference that the government would, “provide loans or capital to banking isntitutions that are experiencing difficulties,” but noted that the measures were preventative, “as no bank in Macau is facing financial difficulties.”
Tam said, “there is no banking institution in Macau in financial difficulties,” as over the last few years “the banks have adopted principles of operating stability and prudent management.” MCH.
He also announced that the measure would immediately come into effect and would last until the end of 2010, when they would be reviewed based on the economic climate.
Faced with the global financial crisis and the fragile state of some financial sector operators, the Macau government wants to “maintain the stability of the system and prevent possible impacts on other jurisdictions,” Tam said noting that, “probabilities are very low” that the announced mechanisms would be activated.
According to figures provided by the Secretary, deposits in Macau’s banks total 260 billion patacas, of which 228 billion (US$28.5 billion) are deposited in local banks.
The remaining deposits, worth over 30 billion patacas (US$3.75 billion), are in offshore banks, Tam said. Each bank has deposits of between 1 billion and 60 billion patacas, he said.
In order to meet the obligations it has announced, the Macau government has foreign currency reserves of 120 billion patacas (US$15 billion), according to figures dating from August.
The government’s projections for the end of 2008 point to accumulated totals of 80 billion patacas (US$10 billion), MacauNews reported.
Tam noted that the international financial crisis would affect Macau’s economic growth over the next few years but gave assurances that the government would keep an eye on the situation and make adjustments as needed.
The Secretary of State for the Economy and Finance also said that in the current context of the international financial crisis the gaming industry was not immune and that the sector had already entered a consolidation phase, especially after adjustments introduced by the government.
Tam also said that, “due to changes seen in the international economic climate, it would not be unusual to see a slowdown in some projects, including in the gaming sector.”
At the beginning of October Tam said that economic growth in Macau in 2008 would total 10 percent.
In 2007 Macau’s economic growth was 23.7 percent and 17 percent in 2006.
