Taiwan FSC to do stress tests on Chinese banks every quarter
Tseng Ming-chung at a press event in Taipei, Oct. 7. (Photo/Yen Chien-lung)
Taiwan’s Financial Supervisory Committee (FSC) plans to conduct stress tests to assess the credit risks of China’s banks every quarter, reports our Chinese-language sister paper China Times.
FSC chairman Tseng Ming-chung said the quarterly report will be published one month after data has been gathered. The pressure tests will suppose that China’s economy grows or slumps by margins of 1% to 2%.
The FSC has selected 10 Chinese banks it judge’s the most prone to credit issues to prevent the offshore banking units of Taiwanese banks becoming involved in related disputes.
Tseng said nine Chinese banks were found to have issues after a series of tests and inspections in 2013 and were requested to improve their management. Most issues occurred with the offshore banking units of Chinese enterprises because most Taiwanese banks assumed that a Chinese company listed overseas would not likely be a subject for credit issues.
Tseng said Taiwanese banks’ loans to Chinese enterprises amounts to NT$128 billion (US$4.2 billion), and most of this sum comes from Taiwanese enterprises.
