Does the Hong Kong government have a Freddie Mac or Fannie Mae in the making? The Hong Kong Mortgage Corporation Limited was formed in 1997 to loan money to people who needed more than 70% of a property’s price that banks could lend them. The HKMC also bought mortgages from the banks in order to provide them liquidity to provide more loans. But recently the HKMC has also been buying mortgage-backed securities from South Korea and Malaysia, and partnered with a subsidiary of the People’s Bank of China to provide bridge finance guarantees. That has critics decrying the investments as risky, saying the HKMC should not be investing taxpayer’s money that way.
The Chief Executive delivered his annual Policy Address this week. Money Magazine talks to a panel of experts about the state of Hong Kong’s economic health, and how CE’s speech addresses that.