We got details from O.Chuluunbat, Parliament member on information related to the draft resolution on State Monetary Policy Guidelines of the year 2009 in compliance with 10.2 of the Article 10 of the Mongol bank law of Mongolia submitted to the Parliament on Oct. 29.
Q: Why commercial banks stop lending?
O.Chuluunbat: World nations inform the public on economic situation in advance because banking sector is a very vulnerable one since it is based on trust and is hit first by the international economy. The state shall take particular measures if commercial banks face problems and therefore the Parliament and the Cabinet discussions started on taking appropriate measures compatible to the current conditions.
Q: Isn’t it the main reason that commercial banks couldn’t provide mortgage lending?
O.Chuluunbat: This can be true. According to the last information lending of MNT600-700 billion was provided but this is the most reliable loan portfolio. Our commercial banks are careful about lending mortgage loans, for example 30 – 50 percent is taken in advance when lending loans. Thus I would say confidently that there will be no risk if the state buys all of these shares. There is nothing to fear.
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