Featured Product

    FSC Taiwan Extends Payment Deferrals, Announces Stress Tests for Banks

    February 09, 2021

    FSC Taiwan extended the timeline for COVID-19-related payment deferrals from December 31, 2020 to June 2021. The relief measures apply to home loans, auto loans, unsecured consumer loans, and credit card debt. In a separate statement, FSC Taiwan announced that 36 domestic banks will be required to conduct the regulatory stress tests in 2021. This round of domestic bank stress tests will adopt both mild and severe scenarios. This round of stress tests will, for the first time, test capital adequacy under operational risk stress scenarios (both mild and severe), which assume that a bank is subject to an enforcement action and has been required to increase its operational risk capital.

    The stress tests will be based on financial reports’ capital adequacy data of the end of 2020. Among others, the stress tests will be conducted to understand how the financial resilience of domestic banks will be affected by low interest rates and the continuing impact of COVID-19. By employing consistent stress test scenarios, banks will calculate the degree to which capital adequacy ratios and leverage ratios have changed. The overall stress scenario will measure whether banks have sufficient risk-bearing capacity to withstand:

    • Increased losses resulting from a number of stress factors such as falling economic growth rates in Taiwan, the US, the eurozone, mainland China, and Japan; rising domestic unemployment; and declining real estate prices, which result in increased credit risk and sharper volatility on bond, stock, exchange, and commodity markets, which in turn cause increased losses.
    • Impact on earnings, caused by a narrowing in net interest rate spreads and a decline in fee incomes.

     

    Related Links

    Keywords: Asia Pacific, Taiwan, Banking, Stress Testing, COVID-19, Credit Risk, Payment Deferrals, Operational Risk, Regulatory Capital, Basel, FSC Taiwan

    Featured Experts
    Related Articles
    News

    PRA Letter Sets Out Findings on Reliability of Regulatory Reporting

    PRA published a "Dear CEO" letter that sets out findings of a review on the reliability of regulatory reporting and reiterates the supervisory expectations on regulatory reporting.

    September 10, 2021 WebPage Regulatory News
    News

    APRA Connect to Go Live; APRA to Reduce Reliance on CLF

    The Australian Prudential Regulation Authority (APRA) confirmed that its new data collection solution APRA Connect will go live on September 13, 2021.

    September 10, 2021 WebPage Regulatory News
    News

    FED Paper Explores Fintech Partnership Dynamics in Community Banks

    The Federal Reserve System (FED) published a paper describing the landscape of partnerships between community banks and fintech companies.

    September 09, 2021 WebPage Regulatory News
    News

    FDIC Selects Four Vendors for Next Phase of Rapid Prototyping Pilot

    The Federal Deposit Insurance Corporation (FDIC) has chosen four companies—Novantas Inc, Palantir Technologies Inc, PeerIQ, and S&P Global Market Intelligence LLC—to propose a pilot consisting of testing new reporting and analytical tools with a small group of FDIC-supervised institutions on a voluntary basis.

    September 09, 2021 WebPage Regulatory News
    News

    PRA Consults on Requirements to Identify Material Risk-Takers

    The Prudential Regulatory Authority (PRA), via the consultation paper CP18/21, proposed changes to the applicable requirements on the identification of material risk-takers for the purposes of the remuneration regime.

    September 08, 2021 WebPage Regulatory News
    News

    ESA Report Points to Elevated Credit and Cyber Risks in Wake of Crisis

    The Joint Committee of European Supervisory Authorities (ESAs) published its second 2021 joint risk assessment report for the financial sector.

    September 08, 2021 WebPage Regulatory News
    News

    IOSCO on Compliance of Credit-Sensitive Rate with Benchmark Principles

    The International Organization of Securities Commissions (IOSCO) published a statement reiterating the importance of continued transition to robust alternative financial benchmarks—that is, risk-free rates—to mitigate potential risks arising from the cessation of LIBOR, including the USD LIBOR.

    September 08, 2021 WebPage Regulatory News
    News

    FED Proposes Revisions to FR Y-9 Reports

    The Board of Governors of the Federal Reserve System (FED) proposed revisions and three-year extension of the FRY-9 reports on financial statements for holding companies (OMB Control Number 7100-0128).

    September 08, 2021 WebPage Regulatory News
    News

    SRB Chair Discusses Improving Resolution Framework for Mid-Size Banks

    The Single Resolution Board (SRB) Chair, Elke König, published an article on improving the resolution framework for medium-size banks.

    September 08, 2021 WebPage Regulatory News
    News

    ACPR Issues Update on Reporting with Legal Entity Identifier

    The French Prudential Control and Resolution Authority (ACPR) announced that the testing environment for the ACPR information system and the OneGate portal will be available to receive test reports with the Legal Entity Identifier (LEI) from September 08, 2021.

    September 07, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7456