The HKMA has also been very focused on raising the market’s awareness of LIBOR transition. We have spoken in different conferences on this topic, and also encouraged industry bodies, such as TMA, to organise seminars to explain the background and implication of LIBOR transition. All of the efforts, by us or by the industry, have a common goal – that is to reach out to a wide range of audience for their attention and get ready for this important LIBOR transition. Urgency of the LIBOR Transition 10. As we all know, time is running short, and end-2021 is fast approaching. Now, with a clear and certain timetable for LIBOR cessation, we should all work together with a sense of urgency. Although certain US dollar LIBOR settings will continue to be published until endJune 2023, this 18-month extension is intended to allow time for more legacy US dollar LIBOR contracts to mature. And, this won’t alter the fact that – LIBOR will come to an end. It is therefore vital for us to continue our preparation that is currently underway, and avoid any further build-up of LIBOR-related exposures going forward. With that in mind and to smoothen the transition process, we expect banks in Hong Kong to cease to issue new LIBOR-linked contracts by the end of this year. Development of the HKD Overnight Index Average (HONIA) Linked Market 11. As we have stepped into the fourth quarter, we will soon move into a post-LIBOR world.
Consequently, a higher share of SMEs than of large firms said that their profits had deteriorated in the first half of the year. Given the economic situation, it may come as no surprise that a limited share of euro area SMEs (10%) also reported a deterioration in their own capital (the share of large firms reporting a decline was lower). These developments certainly had an impact on the response to applications for bank loans and, more generally, on the availability of bank loans to euro area firms in the first half of 2009. Notwithstanding the deterioration in the economic situation, the majority of SMEs report that they were successful in applying for a bank loan in the first half of 2009 (see Chart 8). This is one of the main findings of the survey. It provides a very useful overall picture of bank loan supply and helps to answer the question of whether SMEs experienced financing constraints in the first half of 2009. In the period under review, 60% of the SMEs that had applied for a bank loan received the full amount they had requested. An additional 17% said they had received at least part of the amount requested, so that 77% of SMEs received either all or part of the requested bank loan. By contrast, 12% of SMEs had their bank loan application rejected. Unfortunately, we are not yet in a position to compare these results over time to assess whether these shares are high or low.