Hong Kong Says Loans to Mortgage Firms May Undermine Curbs
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Hong Kong banks’ support for mortgage lending by finance companies may reduce the effectiveness of home-lending controls and should be discouraged, the city’s watchdog said.
“If banks provide loans to finance companies to support their mortgage business and these finance companies do not follow the Hong Kong Monetary Authority’s guidelines on property mortgage lending, this may undermine the effectiveness of the prudential measures,” the regulator said in an e-mailed reply to questions. The HKMA “does not encourage banks to provide loans to these finance companies,” it said.