The Financial Supervisory Commission (FSC) is later this month to begin a special examination of the nation’s top 10 mortgage lenders to see if banks exercise solid risk management, FSC Chairman Thomas Huang (黃天牧) said on Monday.
The commission would examine the first bank this month and complete the special examination by March, Huang said at a meeting of the legislature’s Finance Committee in Taipei.
He did not identify the banks.
Photo: CNA
The examination would focus on banks’ risk assessment for extending luxury housing loans, construction loans and loans to developers who put their unsold houses up as collateral, Huang said.
Whether banks have complied with the central bank’s credit controls, such as the loan-to-value requirements, would also be part of the commission’s inspection, he said.
Besides the special examination, the commission’s regular banking inspections would focus on commercial real-estate lending, Huang added.
Asked whether banks play a role in pushing up housing prices, Huang said that more data would be needed to reach a conclusion.
“Housing prices are affected by many factors,” Huang said. “What the FSC can do is to ensure that banks exercise solid risk controls and comply with regulations.”
The central bank on Monday announced that it was tightening its credit controls to prevent an excessive flow of credit to the property market.
The FSC said that in its special examination it would pay close attention to banks regarding the central bank’s new measures.
The central bank’s new measures include capping the loan-to-value ratio at 60 percent for housing loans granted to corporate buyers for their first property and at 50 percent for their second, while the limit on the ratio for an individuals’ third property is set at 60 percent.
As for loans granted to developers who use unsold houses as collateral, the central bank is capping the ratio at 50 percent.
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