Taiwan’s FSC Targets Emerging ‘Four Loans’ Risk in Routine Inspections

Taiwan’s central bank has warned that housing-market credit controls could divert some funds into equities. Borrowers may simultaneously carry a mortgage, a revolving home-equity loan, a stock-backed loan and an unsecured personal loan, a combination dubbed the “four loans.” Such leverage could amplify repayment pressure and collateral calls if stock or home prices fall, making it a focus for financial regulators.

The Financial Supervisory Commission recently began routine financial inspections and will continue monitoring three areas of bank lending: revolving credit secured by owner-occupied homes, stock-backed loans and unsecured personal loans. The FSC said banks’ nonperforming loan ratios remain stable. Rules cap unsecured debt at 22 times a borrower’s monthly income under the DBR22 limit, while post-lending controls provide an additional safeguard, leaving overall risk manageable for now.