Regulatory Alerts2016-07-15
Added · Updated
HKMA Guidance on Treating HKMC 80% Loan Guarantee as Secured Exposure
The Hong Kong Monetary Authority issued guidance to authorized institutions regarding the risk management treatment of the HKMC 80% Loan Guarantee Product under the SME Financing Guarantee Scheme. The regulator clarified that due to the Government's HK$100 billion commitment and letter of comfort, institutions may reasonably classify the guaranteed portion of SME loans as secured exposure. This interpretation aligns with paragraph 3.2.4 of the SPM module CR-G-7, which addresses collateral and guarantees.
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