Taiwan regulator sets tougher provisioning for local banks’ China exposure

Date: April 13, 2015
By: J.R. Wu; editing by John Stonestreet

(Reuters) – Taiwanese banks will need to strengthen loan coverage provisions on business related to China, in a move designed to better protect local lenders’ growing exposure to the mainland, the island’s financial regulator said on Monday.

The banks will need to increase loan loss reserves to at least 1.5 percent of total outstanding credit extended to China from 1 percent by the end of this year, according to new rules issued by the Financial Supervisory Commission.

The regulator also directed banks to strengthen their oversight on short-term trade financing.

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