To supervise banks to strengthen the risk control of real estate loans and improve banking operations, FSC Taiwan will require banks to strengthen the management of the concentration risk of "construction loans" undertaken by banks. In case of excessive concentration of "construction loans," it is advisable to diversify the allocation of risky assets, moderately reduce the concentration risk, or moderately increase the allowance for bad debts to accumulate the ability to bear risks.
As of the end of October 2020, the ratio of "construction loans" undertaken by all domestic banks to total loans was 8.62%. For banks having high degree of concentration in "construction loans," FSC will require the banks to propose and implement improvement plans on their own and will take necessary supervisory measures in due course. FSC highlights that banks should implement risk concentration control for real estate loans and follow the relevant provision of the Banking Law, incorporate funds; operating costs; and risk factors into loan pricing measures, and appropriately increase allowances for bad debts based on risk management. FSC has already reminded banks to fully disclose information to consumers on real estate credit, at a meeting conducted in November 2020.
Related Link (in Chinese): Press Release
Keywords: Asia Pacific, Taiwan, Banking, Credit Risk, Real Estate Loans, Concentration Risk, FSC Taiwan
Previous ArticleBaFin Consults on External Bail-In Implementation in Germany
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards
The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.
The Basel Committee on Banking Supervision (BCBS) launched consultation on a Pillar 3 disclosure framework for climate-related financial risks, with the comment period ending on February 29, 2024.
The U.S. President Joe Biden signed an Executive Order, dated October 30, 2023, to ensure safe, secure, and trustworthy development and use of artificial intelligence (AI).
The Monetary Authority of Singapore (MAS) launched an integrated digital platform, Gprnt, also known as “Greenprint.”