I AM writing in reply to a Monitor piece on securitisation (South China Morning Post, April 5). The piece seems to be making two points: (a) Citing the Nan Fung mortgage-backed loan as an example, it suggests that ''the Monetary Authority applies different standards to property developers and banks'' in respect of securitisation. (b) It also implies that support for securitisation is inconsistent with the Government's attempts to cool down the property market.
Both these arguments are misconceived.
As regards the first, the Monetary Authority has a specific statutory responsibility to supervise banks with a view to promoting stability of the system.
It has no such responsibility in relation to property developers and is in no position to apply standards to them.
In any case, the Monetary Authority has not, as suggested by the Monitor, issued specific instructions to banks about whether they should take part in the Nan Fung loan.
We did, however, write to the banks in February advising them, in the context of general guidance about their property exposure, that they should take care that they were not financing mortgage loans provided by property developers. This seems simple commonsense.