The Financial Supervisory Commission (FSC) has deferred the implementation of the Basel III standards and capital requirements for “domestic systemically important banks” to ease their capital pressure so they can concentrate on helping businesses affected by the COVID-19 pandemic, FSC Chairman Thomas Huang (黃天牧) said yesterday.
The Basel III standards were set by the Basel Committee on Banking Supervision (BCBS) and were originally to take effect on Jan. 1, 2022. They have stricter capital requirements and adopt different approaches to calculating risks.
However, the implementation of the standards would be delayed by one year in line with the revised timeline announced by the BCBS, Huang said.
The move is expected to save banks time and resources adapting to the new rules, and help them focus on offering financial assistance to companies affected by the pandemic, he said.
The commission also delayed the adoption of a new calculation method for risk weights for mortgages based on loan-to-value ratio from September to June next year, Banking Bureau Director-General Jean Chiu (邱淑貞) said.
The commission does not want banks to come under increased pressure to maintain capital adequacy at this point and would like them to offer more loans to those who need them, Chiu said.
The implementation of new capital cushion standards for domestic systemically important banks would be deferred by one year as the commission hopes the big lenders will prioritize providing help to the real economy, she said.
As of May 20, banks in Taiwan had approved NT$604 billion (US$20.14 billion) of relief loans to 78,898 businesses and individuals, an increase of 14 percent and 24 percent respectively from a week earlier, data compiled by the commission showed last week.
Of the total, NT$238 billion of loans were extended to 19,287 companies that qualified for the government’s relief programs, up 20 percent and 25 percent respectively from a week earlier, the data showed.
Since the beginning of the outbreak, government agencies, such as the Ministry of Economic Affairs, the Ministry of Transportation and Communications, the Ministry of Health and Welfare, the Council of Agriculture and the Ministry of Culture, have launched aid programs to help affected businesses and individuals.
The economics ministry offers subsidies for interest payments and handling fees to companies whose revenues have declined by at least 15 percent from last year’s average and have not dismissed any employees or reduced their salaries.
As of May 20, banks had also extended NT$226 billion of loans to 31,598 companies that did not qualify for the government’s relief programs, up 8.6 percent and 30 percent from a week earlier respectively, the data showed.
Over the same period, banks provided NT$140 billion of loans to 28,013 individuals affected by the pandemic, up 13 percent and 18 percent from a week earlier, the data showed.
State-run lenders continued to be the main source of relief loans with combined lending of NT$441 billion, accounting for 73 percent of the total. They had extended loans to 48,706 companies and individuals, averaging NT$9.07 million per application, higher than private banks’ average of NT$5.4 million per application, the data showed.
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
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