Regulatory Alerts2019-12-16
Added · Updated
Regulatory Treatment of Exposure to HKMCI under the 90% Loan Guarantee Scheme
The Hong Kong Monetary Authority confirms that the Government's letter of comfort to HKMCI qualifies for exemption from large exposure limits under the Banking (Exposure Limits) Rules. Authorized Institutions may treat the Government's commitment as a counter-guarantee for capital adequacy calculations under the Banking (Capital) Rules, provided specific credit risk mitigation conditions are met. Additionally, the HKMA considers it reasonable for institutions to classify the guaranteed portion of SME loans as secured for risk management purposes under the relevant supervisory policy manual.