Friday 21 December 2012

Taiwan banks face higher systemic risk in the long run, says Fitch

Taiwan banks can be expected to face higher systemic risk in the long run due to increasing opportunities for credit exposure to Taiwanese companies operating in China, according to a new report from ratings agency Fitch Ratings. Cherry Huang, an analyst at Fitch, told Compliance Complete that an increasing number of loans made by Taiwan banks to Taiwanese companies operating in mainland China could increase systemic risk in the island's banking system.

In a recent report on the outlook for banks in Asia-Pacific, Fitch said that while Taiwanese banks' China-related credit would remain around eight percent of total assets in the coming year, the condition could become riskier in the longer term.

Banks in Taiwan are lobbying the island's financial regulator, the Financial Supervision Commission (FSC), to lift the regulatory ceiling for China-related credit exposure. However, the Fitch report pointed out that China was ranked highest in terms of systemic risk, according to a micro-prudential index (MPI), whereas Taiwan was ranked near the bottom.

To read more, please visit:

http://www.complinet.com/global/news/news/article.html?ref=160953&bulletin=spotlight&region=_10115



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