But as I say, Hong Kong is a compassionate community, and we need to be in step with those values. 36. We will probably need to consider a similar tolerant approach in future with small businesses that are perhaps slow to adopt e-payment systems. 37. That brings us to the overall segment of start-ups, and companies moving into Hong Kong. These clients have complained a great deal about the difficulty of simply opening corporate accounts. 38. These complaints were potentially affecting Hong Kong’s reputation as a welcoming place for business. We took this very seriously, and we believe we managed to sort out some of the underlying problems. 39. But this is a classic example of the dilemma we all face – as industry players and as the regulator. We do not want awkward due diligence and know-your-customer procedures. But we cannot accept the reputational harm and the other possible costs if one of our leading banks cuts corners and is then found to be handling funds from illicit activities. 40. This challenge – balancing risk – will continue. Technology 41. Perhaps the main possible solution to the problem of growing complexity is technology. And that brings me to my next subject. 42. Most of us here can remember when basic online banking was a novelty, and how we faced new challenges in cybersecurity. In the years to come, we are going to see continued transformation. We have already issued licences for eight virtual banks. 43.
It is a fundamental priority of the HKMA to ensure that the community can have full confidence in the system. 15. Confidence in our banks is also key to the functioning of our economy and society. And our work in this area in the last 10 years has affected all of you here today. 16. I think the most high-profile example is the loan-to-value ratio and debt-serving ratio limits on property mortgage loans. The last 10 years have seen strongly rising property prices, and competition between banks has been fierce. To some observers, including home-buyers, mortgage caps seem like a nuisance and make it harder to buy a property. But to the HKMA, it is an important matter of credit risk management and the stability of the banking system. We call these measures “counter-cyclical macroprudential”. And it would be highly irresponsible of us if we did not impose these limits. 17. This is also the case with Mainland-related lending. You all know the ways we have stepped up our supervisory efforts in this area, to ensure credit underwriting standards and risk management. As with property lending, the basic principle is “prevention is better than cure”. To take one example, we are collecting granular data from banks more frequently, to help identify emerging risks. As with mortgage caps, this might not please everyone – but it serves the wider public interest. 18. More generally, we have been implementing Basel III.