The channels include a decline in the value of government securities they hold, erosion of their ability of funding due to the depreciation of values of collateral among others. Real economic activity suffers from rises in funding rates and difficulties in obtaining liquidity. As a result, tax revenue declines and confidence in a government’s ability to repay their debts is weakened.
In 2006, in response to the new laws on anti-money laundering (AML) and combating the financing of terrorism (CFT) implemented in Macao, we revised the “Guidelines on Prevention and Combating Money Laundering and Financing of Terrorism in Insurance”. Besides, the limit of indemnity of the Employee’s Compensation Insurance Ordinance was adjusted upward to cope with the market situation.