In the wording of the Treaty, the ECB is requested to contribute to the smooth conduct of policies pursued by the competent authorities with respect to the prudential supervision of credit institutions and the stability of the financial system. Furthermore, the ECB’s financial stability function is also related to its responsibility for overseeing financial market infrastructures. The legal framework under which the ECB collects statistical data has in fact recently been extended to expressly recognise its powers to collect data for this purpose. BIS central bankers’ speeches  1  In 2011 the EU institutional framework was revised to explicitly address both macro and micro-prudential supervision. This led to the establishment of the European System of Financial Supervision, the three new European Supervisory Authorities (ESAs) and the European Systemic Risk Board (ESRB). The ECB is in charge of providing analytical and statistical support to the ESRB, notably by collecting and processing information that feeds into discussions within the ESRB. 1 3. What has been achieved so far? In recognition of an increasingly interconnected financial system, considerable progress is being made in the enhancement and development of new statistics at the euro area, EU and global level. At the euro area level, improvements in ECB statistics are notable with regard to, in particular, the development of enhanced statistics relating to monetary financial institutions (MFIs) and to shadow banking (e.g. securitisation vehicles).
For the HKMC, MBS provide an important source of funding and an effective tool for managing the risks of its fast-expanding mortgage portfolio. In a short span of six years, the Corporation’s mortgage pool has increased to over $ billion, which is funded by debts of a similar amount. Momentum is expected to pick up further with the planned acquisition of between $ billion and $ billion of mortgage portfolios before the end of 2004. The proceeds from issuance of MBS help relieve the funding pressure of the mortgage purchase programme. The securitisation process also enables the Corporation to reduce the Prime-HIBOR basis risk and the refinancing risk of its mortgage portfolio. There are in fact two MBS programmes that have been developed by the HKMC. We made a modest start in October 1999 with the launch of the Guaranteed Mortgage-Backed Pass-Through Securitisation Programme. There were a total of eight series of MBS issued under that Programme, with an aggregate amount of about $ billion. The back-to-back structure of the MBS issued allows the participating banks to keep a substantial portion of the cash flow from the mortgage pools, while reducing the credit risk and capital cost through the HKMC’s guarantee of the securities. It also provides them with the option at any time to off-load part or all of an issue to suit their liquidity or trading objectives.