Regulatory Alerts2012-06-27
Added · Updated
Exposure to HKMC: 80% Loan Guarantee Product under SME Financing Guarantee Scheme
The Hong Kong Monetary Authority confirms that the Government's letter of comfort for the HKMC's 80% Loan Guarantee Product satisfies section 81(6)(b)(ii) of the Banking Ordinance. This approval allows authorized institutions to exclude their financial exposure to the HKMC under this specific scheme from the 25% single counterparty limit calculation. For capital adequacy purposes, institutions may treat the Government's commitment as a counter-guarantee under the Banking (Capital) Rules, provided specific credit risk mitigation conditions are met.