Hong Kong regulator to list northern district colleges and park firms as public bodies to cut financing costs
Hong Kong Monetary Authority deputy says 11 post-secondary institutions and three park companies will be listed as local public units to lower their borrowing costs, supporting Northern Territory development. The move reduces risk weighting for bank loans, enabling cheaper financing for long-term pr
The Hong Kong Monetary Authority has outlined measures to support the real economy and development of the Northern Territory, deputy chief executive Raymond Ngai told the Legislative Council's financial affairs committee on 6 November.
Ngai said a dedicated working group has been established to explore public-private partnership models and develop standard financing documents to help banks accelerate financing plans. The Northern Territory financial advisory working group will hold its third meeting soon.
The regulator is working to list 11 post-secondary institutions and three park companies as "local public units" to lower their financing costs and assist related construction, Ngai said. He explained that designating an entity as a public-related institution carries a lower risk weight, meaning banks need to set aside less capital support for loans to such institutions. This in turn lowers lending rates, helping universities and park companies secure cheaper financing.
Noting that most Northern Territory projects are long-term, Ngai encouraged banks to design longer-term financing arrangements for these institutions. The Hong Kong Institute of Bankers is also reviewing more than ten existing specialist talent standards to adjust and identify skills needed for the next generation.
Deputy chief executive Eric Chan said the five-year bond futures launched in August have had a good start, and there is room to introduce other maturities. However, this will depend on reviewing market operational risks, trading volumes, and interactions with the onshore market.