Members of the SIFMA Government Operations Committee and the Wholesale Securities Customer Advisory Group have consistently expressed their desire for this enhancement, which reflects an important opportunity for customers to realize value from the modernized Fedwire Securities platform. Strategy 2 seeks to provide customers with greater and more flexible access to Fedwire Securities Service data to support reconciliation, perform analytics, enhance risk management reporting, and project liquidity needs. Strategy 3 seeks to improve credit and liquidity risk management tools available to depository institutions and the Reserve Banks to manage and control daylight overdrafts that derive from the delivery-versus-payment nature of the Fedwire Securities Service. Strategy 4 seeks to examine the costs and benefits of expanded operating hours for the Fedwire Securities Service, reflecting an increasingly global world in which financial institutions and their customers conduct transactions at all hours across multiple jurisdictions. Many stakeholders have suggested that expanded hours will enhance the ability of financial institutions to mobilize collateral in domestic and international markets and provide participants with better access to liquidity, especially during periods of stress, recognizing that we serve as central securities depository for the largest, deepest, and most liquid pool of collateral in the world. While these prospective benefits must be assessed against potential costs, and require more comprehensive study across a wide range of stakeholders before any commitment can be made, the time to assess an expansion in operating hours for the Fedwire Securities Service has come.

During property market and economic downturns, the chance of default for this group of borrowers can be significantly higher than those with only one property under mortgage. In view of this, the HKMA considers it necessary to require banks to further tighten the underwriting criteria for mortgage loans to borrowers with multiple property mortgages to reduce the risk of banks. BIS central bankers’ speeches  1  6. Besides, the HKMA notices a recent trend of lengthening average tenor of new mortgage loans. The average tenor for new mortgage loans now is 25 years, which is three years longer than that of 22 years in 2009. Some banks have extended the maximum tenor to even 40 years. Prolonged loan tenors will not only increase credit risk of banks, but may also weaken the ability of borrowers to withstand interest rate risk. In particular, when mortgage rates return to more normal levels, borrowers with a loan that already stretches to 30 or even 40 years simply cannot seek to reduce their monthly instalment payment burden by extending the tenor, and may therefore face financial difficulty. Therefore the HKMA has now required banks to set the ceiling for the maximum loan tenor for all new mortgage loans to not more than 30 years. 7. The above measures take effect immediately. However, loan applications in respect of property transactions with provisional sale and purchase agreements signed today or earlier will not be affected. 8. Mr Arthur Yuen, our Deputy Chief Executive, will explain the details of these measures later.