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Hong Kong steps up supervision of banks' credit risk management

Published on Apr 16, 2014 10:51 AM

HONG KONG (RLPC) - The Hong Kong Monetary Authority (HKMA) is stepping up its supervision of Hong-Kong-based banks' credit risk management by asking banks to show stable funding requirements and agree to regular onsite examinations of credit underwriting processes and stress-testing, the HKMA said in a statement.

These measures come after a steep rise in offshore lending to Chinese mainland companies by Hong Kong-based banks.

Chinese onshore companies borrowed HK$2.276 trillion (S$368.1 billion) of customer loans at the end of 2013, excluding HK$313 billion of trade finance loans, according to the HKMA.

"The increase in Hong Kong banking sector's mainland-related lending is a natural consequence of the growth of the mainland economy and development of mainland corporates," said HKMA, which reinforces Hong Kong's role as a significant international financial centre.

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