Cautious about a looming mortgage bubble that could burst, the Financial Supervisory Commission said yesterday it will start inspecting the mortgage lending practices of local banks next month.
"We will include the review of mortgage lending in the inspection items on banks, starting from May," commission spokeswoman Susan Chang (張秀蓮) said yesterday.
The commission is also mulling an ad hoc probe into all banks on housing mortgage lending, she said.
Article 72-2 of the Banking law (銀行法) stipulates that the balance of housing mortgage lending plus loans to developers is capped at 30 percent of the total amount of deposits balance and financial debts.
The commission "has reminded a few banks whose mortgage lending balance is approaching the limit" to be cautious, Chang said.
These lenders included Taiwan Cooperative Bank (
The commission was alarmed after the average ratio of mortgage lending in the banking sector as a whole exceeded 20 percent and the amount of mortgage bad debts had increased in the previous two years.
However, the financial regulator has no plan to revise the ratio upward, Chang said.
RSS