The Financial Supervisory Commission (FSC) yesterday said it was considering relaxing the rules governing local banks’ loan and investment exposure to China to facilitate the growing economic and financial exchanges across the Taiwan Strait.
The law that governs Taiwanese lenders’ business activities in China now stipulates that a bank’s aggregate amount of credit, investment, interbank loans and deposits shall not exceed 100 percent of its net worth as of the end of the preceding fiscal year.
While the law is designed to require Taiwanese banks to fully evaluate the risk of doing business in China and thus ensure the safety of their assets, since Taiwan and China signed a memorandum of understanding on a currency clearing agreement on Aug. 31 last year, the commission said the time was ripe for authorities to review the rules as domestic banks gear up to expand their business in China.
After consultation with the central bank and local banks, the commission said it was considering allowing a bank to exclude the part of loans it has yet disbursed from the calculation of its total amount of credit in China, the commission said in a statement posted on its Web site.
In addition, 80 percent of a bank’s interbank loans with investment-grade peers, which have maturities of less than three months, could be excluded in the calculation of the bank’s total interbank loans, the commission said.
When calculating a bank's investment exposure in China, the commission said the bank may also count only the parent company's exposure and remove that of its subsidiaries from the total exposure.
Under the new calculation methods, the commission said the banking industry would have an additional NT$320 billion for investing and credit facilities in China.
The total net worth of Taiwanese banks stood at NT$2 trillion, while their total loan and investment exposure to China was NT$930 billion as of the end of November last year, according to the commission's latest statistics.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into
O2O BICYCLE SHOW: The Taiwan Bicycle Show next year is to be online to offline, with forums, audio-visual conferences and livestreaming of the offline events Local bicycle makers expect demand to continue outpacing supply due to orders triggered by the COVID-19 pandemic, with some companies seeing orders back up through next year. “Next year is all full in terms of orders. Our lead time on components is one year,” Giant Manufacturing Co Ltd (巨大機械) chairwoman Bonnie Tu (杜綉珍) told a news conference in Taipei organized by the Taiwan External Trade Development Council (TAITRA) to announce next year’s Taipei Cycle Show. The pandemic has reduced bicycle supplies and increased demand around the world, Robert Wu (吳盈進), chairman of KMC (Kuei Meng) International Inc (桂盟國際), one of the world’s