The Hong Kong Monetary Authority will meet the city’s nine largest lenders to discuss how to provide financing to small and medium enterprises as the economy faces a technical recession.
Among the nine lenders that will join the meeting are HSBC, Standard Chartered, Bank of China (Hong Kong), Hang Seng and Bank of East Asia (BEA), said BEA corporate banking head Thomas Tsui in an «SCMP» report. Officials from the Hong Kong Mortgage Corporation, which arranges government guarantees for small business loans, will also attend the meeting.
The central bank meeting follows a 50 basis point reduction of required countercyclical capital buffer which would inject up to $38 billion of capital to the economy with a focus on supporting 330,000 small enterprises.
Loosening Mechanisms
Tsui also made several suggestions for how to provide liquidity to SME businesses including special credit approval processes akin to those implemented during the 2003 outbreak of severe acute respiratory syndrome.
«That proved helpful to the SMEs,» he said. «We can approve loans to SMEs even if their sales have dropped substantially in the past four months, provided they were stable the previous one to two years.»
