Politics
Written by: Ruimin Zhai
2020-04-03 21:59
Last updated: 2020-04-03 21:59The global spread of new pneumonia has impacted the global economy. Lin Jianfeng, vice chairman and member of the Legislative Council of the People's Democratic Alliance, met with legislators and representatives of the chamber of commerce today (3rd) to meet with HKMA officials and representatives of various banks to discuss various options for assisting small and medium-sized enterprises in financing. Lin Jianfeng suggested that the HKMA should work with banks to launch emergency measures to ease the recent liquidity pressure on SMEs.
The HKMA announced in the evening that it will work with the insurance company to further alleviate the cash flow pressure of SMEs with 5 measures, including the introduction of a series of measures to increase the liquidity of the banking system, reduce the bank's existing regulatory reserve level by half, and give qualified SME customers Automatic or non-application loan extensions or delayed repayment arrangements.
Legislative Councillor Lin Jianfeng (second from right) met with a number of Legislative Councillors and chambers of commerce representatives today (3rd) to meet with HKMA officials and representatives of various banks. (Photo by Zhou Lixi / profile picture)
Lin Jianfeng said that at present, Hong Kong's 100 industries are in depression, and many small and medium-sized enterprises are facing the problem of broken capital chains. They believe that the HKMA has room to reduce the bank's countercyclical buffer capital ratio and increase the bank's additional lending quota by more than 100 billion yuan. Further lending by banks and increasing liquidity in the market will help SMEs overcome the current difficulties. He reflected at the meeting that a large number of SMEs engaged in import, export and manufacturing have recently been cancelled orders, and finished product freight has been forced to be postponed. After a significant decrease in income, they still have to pay rents, salaries and bank repayments. Difficulties. He feared that once the corporate capital chain breaks down or individual banks will collect payments, it will trigger a ripple effect, which may have a serious impact on the local employment market and the banking industry.
Lin Jianfeng suggested that the HKMA communicate with banks to find solutions and expand the scope of support to the business community, including allowing bank liquidity loans for SME customers in Hong Kong to include unsecured loans, trade financing, machinery and car club installments and revolving loans, etc. It is possible to repay interest for at least 6 months to alleviate the recent liquidity pressure of SMEs, while avoiding the tightening of loans by individual banks, leading to the risk of corporate capital chain breakage, stabilizing market confidence and maintaining the stability of the Hong Kong banking system. He also believes that the HKMA should give banks greater flexibility and allow banks more room to support different enterprises, especially local SMEs, including more relaxed methods for handling overdue loans by SME banks. This is a very unusual period. We must break through the rules and regulations, and cut across the board.
In the evening, the HKMA responded to the industrial and commercial demands, and proposed a plan with the insurance company to further alleviate the cash flow pressure of SMEs, including the following 5 items:
1. The HKMA will launch a series of measures to increase the liquidity of the banking system to ensure that banks have sufficient funds to support local economic activities. These measures include obtaining U.S. dollars from the Federal Reserve in the form of repo transactions and lending to local banks, clarifying the HKMA's liquidity arrangements to facilitate bank use, and further clarifying the HKMA's position on liquidity regulatory requirements, and encouraging banks to flexibly use liquid funds to support lending And other businesses.
2. Reduced the bank's existing regulatory reserve 2 by half, released more than 200 billion Hong Kong dollars of borrowing space, and increased the flexibility of the bank's balance sheet to meet future loan demand.
3. The HKMA proposes to banks to provide eligible SME customers with automatic or non-application loan extensions or deferred repayment arrangements. Lenders need only choose to accept or not.
4. Regarding the "100% Guaranteed Preferential Loan for SME Financing Guarantee Plan" proposed in the budget, the preparation work of the insurance company and the bank has entered the final stage, and it is expected to announce as soon as possible when eligible SMEs can submit applications to the bank .
5. Regarding recent SMEs engaged in import, export and manufacturing that have experienced difficulties in capital turnover due to freight delays, banks have stated that they will actively allow customers to extend the trade financing repayment period again and allow more customers to apply for temporary conversion of trade financing quotas into cash. The overdraft limit gives customers more flexibility in allocating funds.
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