XN000022-1994-11-16 — Page 61

WEDNESDAY, NOVEMBER 16, 1994

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IN JUNE 1994, THE GOVERNMENT ANNOUNCED A PACKAGE OF MEASURES TO CHECK THE PROPERTY PRICE SPIRAL. THE NOTICEABLE MODERATION IN PROPERTY PRICES SINCE THE ANNOUNCEMENT OF THESE MEASURES WILL DEFINITELY HELP FIRST-TIME HOME BUYERS PURCHASE THEIR OWN HOMES. WE SHALL CONTINUE TO MONITOR THE RESIDENTIAL PROPERTY MARKET CLOSELY.

GIVEN THE CYCLICAL NATURE OF THE PROPERTY MARKET, THE BANKING SECTOR HAS TO MAINTAIN A PRUDENTIAL CUSHION ON MORTGAGE LENDING IN ORDER TO LIMIT ITS EXPOSURE TO THE PROPERTY SECTOR. THE 70% LOAN-TO- VALUE RATIO PROVIDES SUCH A CUSHION AND IS THUS ESSENTIAL FOR MAINTAINING STABILITY IN THE BANKING SYSTEM IN THE EVENT OF ADVERSE MOVEMENTS IN THE PROPERTY MARKET.

LENDING DECISIONS ARE COMMERCIAL DECISIONS. BANKS WOULD NEED TO TAKE INTO ACCOUNT FACTORS SUCH AS THE CREDIT RISK OF THE BORROWER IN MAKING LENDING DECISIONS. FIRST TIME BUYERS, HOWEVER, TEND TO SUFFER GREATER STRAINS ON AFFORDABILITY. CONSEQUENTLY, IT WOULD BE DIFFICULT TO JUSTIFY A HIGHER LENDING RATIO FOR THIS GROUP OF BORROWERS ALONE WHILE CAUTION HAS TO BE EXERCISED GENERALLY ACROSS THE WHOLE SPECTRUM OF RESIDENTIAL MORTGAGE LENDING.

API MESSAGE ON PENSION SCHEME CLEAR

AND A

FOLLOWING IS A QUESTION BY THE HON HENRY TANG YING-YEN WRITTEN REPLY BY THE SECRETARY FOR EDUCATION AND MANPOWER, MR MICHAEL LEUNG, IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY):

QUESTION AS THE CONTENTS OF THE GOVERNMENT'S PROMOTION FILM AND TAPE ABOUT THE "CONSULTATION PAPER ON THE PROPOSED OLD AGE PENSION SCHEME" BROADCAST ON TELEVISION AND THE RADIO ARE MISLEADING IN NATURE AND MAY CREATE THE MISCONCEPTION THAT THE PROPOSAL HAS ALREADY BEEN FINALISED, WILL THE GOVERNMENT INFORM THIS COUNCIL :

(A) OF THE MESSAGE WHICH IS IMPLICIT IN THE PROMOTION

FILM AND TAPE;

(B)

(C)

WHETHER, IT IS APPROPRIATE FOR THE GOVERNMENT IN SOLICITING PUBLIC VIEWS ON A PARTICULAR ISSUE IN ORDER TO GET THE PUBLIC TO BECOME KNOWLEDGEABLE ABOUT THE ISSUE, TO PUBLICISE THE RELEVANT ISSUE IN AN OVERLY AFFIRMATIVE TONE;

WHETHER THE CONTENTS OF SUCH PROMOTION FILMS AND TAPES CURRENTLY BROADCAST ON TELEVISION AND THE RADIO ARE SUBJECT TO SCRUTINY BY ANY MECHANISM; IF NOT, WHAT THE REASONS ARE; AND

/(D) WHETHER THERE