norman t l chan : new round of countercyclical prudential measures for property mortgage lending address by mr norman t l chan, chief executive of the hong kong monetary authority, to the media, hong kong, 14 september 2012. * * * 1. i am going to announce a new round of countercyclical prudential measures for property mortgage lending. 2. since the introduction of the fourth round of tightening measures for property mortgage loans by the hong kong monetary authority ( hkma ) in june 2011, the local property market quieted down somewhat – but for just about seven months. the property market began to heat up again in february 2012, with significant increase both in transaction volume and prices. cumulative growth in property prices was as much as 13 % compared with the beginning of this year. 3. the evolution of the property market cycle in hong kong is affected by many factors, including the external environment. with the third round of quantitative easing announced by the us federal reserve last night, there can be more capital inflows through the us banking system into the emerging markets. moreover, europe has earned some respite from its debt crisis following the announcement by the european central bank of its bond - buying programme and related judgment by germany ’ s constitutional court. so the sentiment in financial markets is likely to stay calmer for a while. against this background, the risk brought by the continued heating up of the hong kong property market on the banking sector will rise again. to enhance risk management of banks, the hkma has just issued a set of guidelines to banks, requiring them to tighten the underwriting criteria for mortgages where borrowers already have one or more properties under mortgage. 4. under these new measures, when handling new applications for mortgage loans for residential, industrial or commercial properties from borrowers who already have one or more properties under mortgage, banks must adopt the following three requirements : first : for mortgage loans assessed based on the debt servicing ability of a mortgage applicant, the maximum debt servicing ratio ( dsr ) shall be lowered from the current 50 % by 10 percentage points to 40 %. accordingly, the maximum stressed dsr shall also be lowered correspondingly from the current 60 % by 10 percentage points to 50 %. however, an applicant with just one property with outstanding mortgage loan will not be affected by this new measure if the new mortgage loan is for self - occupied purpose, or for the replacement of an existing property. second : for mortgage loans assessed based on

behind in terms of qualitative participation. let me keep to the netherlands on this point. according to a report by our social and cultural planning office a few years ago, not a single woman sat on the managing boards of the top 25 dutch companies. in the top 100, there was only one woman to over 400 men, and women made up no more than 2. 5 % in the top 5000. the situation on the supervisory boards was better, but with an average of one woman to 12 men, still not exactly positive. and as far as our banking sector is concerned, i am not sure whether we would have sufficient women top managers to create a delegation like yours. as regards the position of women in senior management, i must unfortunately share some of the blame. the nederlandsche bank has one women among the 12 members of its supervisory board. prince claus, the late husband of our queen beatrix, was instrumental in getting her on our supervisory board by stressing time and again that the successor to him should be a woman. our governing board is made up entirely of men, so in that respect we have a lot to learn from your country. two of our eight deputy executive directors are women. while this is an improvement on the past, we still have a long way to go. we are hence actively working on a plan for a larger number of women at the nederlandsche bank, with more advancement to the top. before i tell you how we intend to do this, let me first go into the reasons why women lag behind. both demand and supply factors play a role. as regards demand, all too often, women are passed over as potential candidates for recruitment or promotion. whereas some feel that this is done with intent, i am inclined to think that it is an unconscious process, arising from a stereotyped view of men and women. in fact, research indicates that men are inclined to appoint men, and women are inclined to appoint women. since management traditionally consists of men, it is easy to see where the glass ceiling comes from, and that it will not disappear unless we make a conscious effort. turning to supply, and women themselves have a role to play here, several causes present themselves. women are less self - confident than men, are not as quick to think that they ’ re suitable or to push themselves forward. that is not just my impression, it has been confirmed by psychological research. another factor is that women sometimes have other preferences in respect