1
Setting up of mortgage corporation approved
The Hong Kong Monetary Authority (HKMA) announced today (Wednesday) that the Exchange Fund Advisory Committee has given approval in principle to the setting up of a mortgage corporation along the following lines:
the mortgage corporation would be owned by the Government initially through the Exchange Fund with a capital base of $1 billion;
the corporation would be a limited company established under the Companies Ordinance; and
the corporation would develop its business in two phases, starting with the purchase of mortgage loans for its own portfolio, followed by the issue of mortgage-backed securities.
The decision to establish a mortgage corporation was made following a consultation exercise that ended in mid-June.
During the consultation period, HKMA convened a number of briefings and discussions with the various institutions and industry associations to explain the proposal and to get comments.
In addition, written comments on the proposal were received from 23 organisations/individuals from a wide spectrum of the community including the banking sector, capital market participants, real estate developers, political groups and academics.
Commenting on the feedback obtained during the consultation, Chief Executive of HKMA, Mr Joseph Yam, said: "The overall reaction was very favourable, indicating broad agreement that the establishment of a mortgage corporation will contribute to banking and monetary stability, debt market development and home financing.
"There is also strong support for initial government ownership of the corporation in securing the acceptance and recognition of the corporation by the market."