Hong Kong Regulator Concerned on Nine-Fold Rise in Margin LoansBy
Borrowing against pledged stock hit $26.3 billion at end-2017
Firms involved are illiquid, so risk to brokers ‘is not small’
Hong Kong’s Securities and Futures Commission is consulting brokers about risks stemming from a rapid run up in margin lending.
Outstanding margin loans — borrowing against pledged stock — hit HK$206 billion ($26.3 billion) at the end of 2017, a nine-fold increase since 2006, Deputy Chief Executive Officer Julia Leung told reporters on Monday. The regulator is worried such lending poses a risk given that many of the firms involved are illiquid and it may take a while for brokers to recover their money in case of a liquidation, Leung said…
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