The paper saidtightening of domestic prudential policies, particularly those tightening measures meant to preserve resilience of the banking system are effective in curbing growth of real bank loan commitments
to borrowers for acquiring new residential properties.
Effective January 1, 2018, the agencies increased the minimum aggregate loan commitment
threshold to be included in the review from $20 million to $100 million.
But that might be misleading because the increase in deposits might be happening at banks with no decline in loan commitments
. At the outset of the crisis, the level of unused commitments was significantly higher than the deposit base supporting these promises.
This kind of practice may contribute to development of irresponsible behavior of economic entities in terms of compliance with loan commitments
and weakening of positions of commercial banks in adequate evaluation of loan risks," the National Bank said.
The Canadian portfolio being acquired includes some $650 million in loan commitments
, of which $500 million is outstanding.
The Shared National Credits (SNCs) Review for 2010 covers large loans and formal loan commitments
that are shared by three or more supervised institutions.
PLN President Fahmi Mochtar said with the additional loan pledges; PLN has secured loan commitments
valued at US$ 4.9 billion and Rp 19.6 trillion for 33 projects
The Financial Services Authority (FSA) is poised to force lenders to look much more closely at the ability of people to make repayments, such as checking spending habits and existing loan commitments
. A ban on self-certification mortgages - under which borrowers do not have to prove their income - is also likely under the FSA's planned reforms for the market in the wake of the credit crunch.
At the same time, BMI announced its new pre-approval process, committing to provide an answer on mortgage loan commitments
and conditions within a maximum of 24 hours to customers who provide their CPR and evidence of income.
It also includes a variable funding note providing an additional financing source for unfunded loan commitments
. The floating rate asset-backed notes are being offered through a Rule 144A/Reg S private offering with offered notes totaling $1.2 billion, or 91.7% of the collateral pool.
: Issues Related to Pricing, Trading, and Accounting, GAO-05-131, Feb.
Issues have been raised whether commercial banks systematically underprice loan commitments
and whether generally accepted accounting principles provide meaningful disclosure of the economics of these commitments.