What are the HKMC’s missions?
Since its inception in 1997, the HKMC has been committed to its missions of promoting stability of the banking sector, wider home ownership, development of the local debt market and development of retirement planning solutions.
In recent years, it has also launched a number of new programmes, such as the SME Financing Guarantee Scheme, the Reverse Mortgage Programme, the Microfinance Scheme and the Premium Loan Insurance Scheme to further strengthen its policy roles and to bridge the market gaps.
What is the relationship between the HKMC and the Hong Kong Special Administrative Region (HKSAR) Government?
The HKMC is wholly owned by the HKSAR Government through the Exchange Fund. The Financial Secretary is the Chairman of the HKMC and the Chief Executive of the Hong Kong Monetary Authority (HKMA) is the Deputy Chairman. The posts of Executive Directors and Chief Executive Officer of the HKMC are occupied by officials of the HKMA.
The Exchange Fund through the HKMA provides the HKMC with a HK$30 billion revolving credit facility as a backup liquidity tool, which facility amount was increased in December 2008 from the original amount of HK$10 billion. Such move demonstrates the HKSAR Government's recognition of the importance of, and its commitment to provide further support for, the HKMC. In addition, the HKMC may call on the Exchange Fund to inject additional capital when needed.
What is the HK$30 billion revolving credit facility provided by the Exchange Fund?
In January 1998, during the Asian Financial Crisis, the Exchange Fund extended a HK$10 billion Revolving Credit Facility to the HKMC through the HKMA. This Facility enables the HKMC to maintain smooth operation under exceptional circumstances, so that it can better fulfil its mandate to promote banking and financial stability in Hong Kong. While the HKMC obtains long-term funding from local and international debt markets to fund its operations, the Facility also provides a liquidity fallback for the HKMC. In light of the global financial crisis in 2008, the size of the Facility was subsequently increased to HK$30 billion in December 2008, demonstrating the HKSAR Government’s recognition of the importance of, and further support for, the HKMC.
The HKMC used the Revolving Credit Facility during times of market stress in 1998 and 2008 to partially fund the acquisition of Hong Kong residential mortgage assets from local banks. At both times, the Revolving Credit Facility was fully repaid with funds raised from the HKMC’s cost-effective debt issuance when the markets stabilised.
Does the HKSAR Government guarantee debts issued by the HKMC?
The HKMC has its own credit ratings, which are same as those of the HKSAR Government. Although the HKMC is wholly owned by the HKSAR Government, the debt securities issued by the HKMC are not guaranteed by the HKSAR Government.