Taiwan FSC Says Consumer Loans Surged NT$8.5 Billion in First Two Months, Urges Banks to Curb Stock-Speculation Risks

Consumer lending includes unsecured borrowing such as personal loans. If large amounts of such funding flow into Taiwan's stock market, they could amplify personal leverage and market volatility. The Banking Bureau of the Financial Supervisory Commission has therefore been monitoring loan growth and instructed banks to assess borrowers, the use of funds, repayment sources, collateral protection and credit prospects under the five principles of credit analysis.

The FSC's latest data showed that consumer loans increased by NT$8.5 billion in January and February from the same period last year, a year-on-year rise of 20%. The Banking Bureau said the figures alone were insufficient to determine whether the additional funds had flowed into Taiwan stocks. It has nevertheless instructed banks to strengthen credit reviews and post-lending controls to prevent defaults and financial risks arising from excessive borrowing for stock speculation.