Regulatory Alerts1995-09-13
Added · Updated
Guideline 5.9.1: Credit Risk Management - Property Mortgage Lending
The Hong Kong Monetary Authority clarifies its property lending policy by redefining the 40% guideline as an industry benchmark rather than a strict upper limit. The regulator mandates that institutions maintain prudent loan-to-value ratios, specifically supporting the 70% ceiling for residential mortgages, while emphasizing borrower repayment capacity over collateral value. Banks are required to implement board-approved written policies that cap overall property exposure and address funding maturity mismatches to mitigate concentration and liquidity risks.
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