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China has been battling to contain a worsening property sector crisis, including a cash crunch for Country Garden, its top private developer, and revive a faltering recovery in the world’s second-largest economy.
Taiwan’s Financial Supervisory Commission (FSC) has not recommended any additional measures to limit exposure risks for its lenders and insurers but is closely monitoring developments in China’s real estate sector, the sources told Reuters.
The sources spoke on condition of anonymity as they were not authorised to speak to the media.
Taiwan banks have high loan loss provisions which puts them in a secure position in the face of any crisis, one of the sources said.
“Taiwanese banks have already reduced their risks along the way,” the source said.
The exposure of Taiwanese insurers to China reached T$94.7 billion ($2.97 billion) as of June, said the second source. FSC chairman Tien-mu Huang said last week that investment and exposure of Taiwan’s financial industry in Country Garden was limited but the industry should be on high alert for any changes in the situation.
($1 = 31.9180 Taiwan dollars)
