I have therefore recently suggested to the Hong Kong Association of Banks that it would be timely to review the manner in which workouts operate in Hong Kong. I will close by pulling together some of lessons that can be drawn from our experience during this difficult period. The Asian crisis has demonstrated weaknesses in banks’ credit controls and even Hong Kong has not been immune from these. Improvements need to be made to deal  5  BIS Review 53/1999  with the aftermath of the crisis and to reduce the chances of similar problems in the future. The key points I would recommend to the banks are as follows: •  Be clear about your lending strategy, including how much risk, and what types of risk, you are prepared to undertake. •  Know your customer, his business and, to the extent possible, his other financial commitments. •  Keep track of what your lending is actually being used for. •  Lend on the basis of cash flow rather than collateral. •  Maintain an effective early warning system for problem loans and make sure that the loan portfolio is properly graded. •  Devote sufficient resources to debt recovery and make sure that your workout staff are properly trained. •  Approach debt workouts in the right spirit of compromise and consensus. These are very basic messages that should be familiar to any prudent lending banker.
We look forward to hearing your views. Why achieving net zero requires action from everyone, including central banks 2020 was a global catastrophe. 3 million lives tragically lost to Covid.2 The worst decline in output since World War 2 globally, and the Great Frost of 1709 in the UK.3 Working hours slashed by the equivalent of 255 million jobs.4 And children’s education cut by at least a quarter.5  Even hardened optimists would struggle to find a silver lining in all of that. But, unintentionally, 2020 did achieve at least one extraordinary thing: it showed us just how big the challenge of tackling climate change  1  Sesame Street: It's Not Easy Being Green (Kermit's Song) - YouTube WHO Coronavirus (COVID-19) Dashboard | WHO Coronavirus (COVID-19) Dashboard With Vaccination Data https://www.imf.org/-/media/Files/Publications/WEO/2021/April/English/Ch1.ashx and https://www.bankofengland.co.uk//media/boe/files/statistics/research-datasets/a-millennium-of-macroeconomic-data-for-theuk.xlsx?la=en&hash=73ABBFB603A709FEEB1FD349B1C61F11527F1DE4 4 wcms_767028.pdf (ilo.org) 5 https://www.imf.org/-/media/Files/Publications/WEO/2021/April/English/Ch1.ashx 2 3  2  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  2  really is. Last year, as a result of all of that turmoil – air travel down by two thirds;6 road miles halved7 – global fossil CO2 emissions fell by 7%.8 That may not sound like much. But it’s the biggest fall for over a century (Chart 1).