Fri, Mar 25, 2011 - Page 12 News List

FSC takes action in attempt to counter property speculation

By Amy Su  /  Staff Reporter

Financial Supervisory Commission chairman Chen Yuh-chang addresses the legislature’s Finance Committee yesterday.

Photo: George Tsorng, Taipei Times

The Financial Supervisory Commission (FSC) has stepped up inspections of local banks’ mortgage loan businesses in a bid to curb property speculation, officials said yesterday.

“We are checking to see if local financial institutions are being strict enough on assessing property values and whether they are concentrating too much of their business on mortgage loans,” Jong Huey-jen (鍾慧貞), director-general of the FSC’s financial examination bureau, told a media briefing.

Lenders’ home loans with dummy accounts was another phenomenon for the commission to investigate, Jong said.

It is the first financial examination project this year, and the commission will spot-check local financial institutions until the end of next month, she said.

Several state-run banks said they had been stricter with mortgage loans in response to the government’s determination to restrict speculative property transactions.

“We have stopped processing land and construction loan financing in Sansia, Tamsui, Linkou and Sinjhuang,” a state-run bank manager, who declined to be named, said by telephone yesterday.

Although the bank is still handling mortgage loans in these areas, its review of loan applications is expected to be stricter, he said.

Bank of Taiwan (台灣銀行), the banking arm of Taiwan Financial Holding Co (台灣金控), also said it had capped land and construction loan financing to no more than 50 percent of property value.

FSC chairman Chen Yuh-chang (陳裕璋) said in a report to the legislature’s Finance Committee yesterday that 17 local banks have focused too much on land financing and mortgage lending.

“Mortgage, land and construction loan financing accounted for 40 percent of total loans in several local banks,” Chen said.

He said the FSC would send reminders to these banks and demand they amend this situation.

Separately, Chen said he expected the cross-strait financial supervisory platform to be in place by June following increasing cross-strait financial exchanges.

“Six local banks have set up branches in China, so it is necessary for Taiwan and China to construct a supervisory mechanism to make consultations,” Chen told lawmakers.

The cross-strait financial supervisory platform would allow both sides to meet on a regular basis in either Taipei or Beijing.

The FSC and its Chinese counterpart, the China Banking Regulatory Commission (CBRC), will continue discussing details of the planned platform, Chen said.

CBRC chairman Liu Mingkang (劉明康) is scheduled to visit Taiwan next month, which may serve as an opportunity for the two sides to talk about more financial cooperation, he said.

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