The Hong Kong Monetary Authority (HKMA) announced that the applicable jurisdictional countercyclical capital buffer (CCyB) ratio for Hong Kong remains unchanged at 1.0%. HKMA also issued an ordinance on temporary protection measures for business tenants and co-hosted the “Green and Sustainable Capital Market Evolution Roundtable Session” with Standard Chartered.
The ordinance, which came into effect on May 01, 2022, is intended to provide temporary protection to business tenants in specified premises whose businesses are hard hit by the fifth wave of the COVID-19 pandemic. This scheme is known as the 100% Personal Loan Guarantee Scheme (PLGS). The ordinance imposes a moratorium to prohibit landlords from terminating the tenancy, suspending the provision of services, or taking other related legal actions against their business tenants of specified sectors for failing to settle rent on schedule for a specified short period. In support of eligible landlords that have been affected by rental enforcement moratorium, the government has announced the provision of interest-free loans of up to three times the monthly rent under the 100% Personal Loan Guarantee Scheme (PLGS), subject to a ceiling of HKD 100,000 per individual. The maximum repayment period is five years, with an option of repayment holiday for the first six months to alleviate the immediate repayment burden of the borrowers. The affected landlords may submit their applications at eleven participating lenders, from May 06, 2022 onward until October 31, 2022.
In addition, the Alliance for Green Commercial Banks, co-launched by HKMA and the International Finance Corporation (IFC), co-hosted the “Green and Sustainable Capital Market Evolution Roundtable Session” with Standard Chartered. During the roundtable session, speakers discussed the rapid growth of the sustainable finance market, the huge funding gap to achieve net zero, and the associated opportunities for global capital markets. The sessions will equip participants with the knowledge needed to support them in their green banking transition and will provide a platform for market participants from commercial banks, leading real sector companies, technology innovators, thought leaders, and regulators to share their first-hand experiences and intelligence. The Alliance was launched, in November 2021, to help banks develop the solutions needed to address climate change across emerging markets. The Alliance plans to host further roundtable sessions on green finance, carbon-neutrality, climate risk, environmental, social and governance factors, market trends and opportunities, and the policy environment, among others.
Keywords: Asia Pacific, Hong Kong, Banking, Basel, Regulatory Capital, CCyB, Covid-19, Ordinance, Personal Loan Guarantee Scheme, ESG, Climate Change Risk, Credit Risk, Sustainable Finance, HKMA
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