By Kao Shih-ching / Staff Reporter
The country’s financial institutions cut their investments in local and foreign stocks by NT$597 billion ($19 billion) in the first seven months of this year, while increasing their bond holdings by $1.5 trillion. NT, the Financial Supervisory Commission announced on Thursday.
The moves came in response to global stock market routs and central bank rate hikes, the commission said.
With the U.S. Federal Reserve expected to raise key interest rates another 75 basis points this month, local financial institutions should continue to increase their bond holdings and reduce their equity positions, he said. declared.
Photo: Ritchie B. Tongo, EPA-EFE
Taiwanese banks, insurance companies and securities firms held NT$3.1 trillion in local and foreign stocks at the end of July, down NT$597.1 billion from late last year, the commission said.
In the first seven months, insurance companies invested NT$2.34 trillion in local and foreign equities, compared to NT$689.2 billion in bank equities and NT$69 billion in equities. securities companies, he said.
Financial institutions’ combined bond holdings totaled NT$27.24 trillion at the end of July, up NT$1.49 trillion from the end of last year as central bank rate hikes pushed up prices. bond yields.
From January to July, life insurance companies increased their bond holdings by NT$904 billion, while banks increased their holdings by NT$596.7 billion, the commission said.
Separately on Tuesday, the commission said an inspection found 20 financial institutions had breached credit control measures for housing finance set by the commission and the central bank.
Inspections of 10 banks, seven credit unions and three bill finance companies revealed six major infractions, the Financial Review Office said.
The most serious violations were related to loan-to-value (LTV) ratio requirements and the calculation of the capital adequacy ratio, he said.
Three banks and a credit union have offered loans to buyers of homes and land with LTV ratios above the ceilings set by the central bank, the office said.
Four banks were found to have used incorrect risk weights to calculate their assets, leading to higher capital adequacy, he said.
A bank and a credit union were found to have loaned funds to property developers as working capital for salaries, rent and overhead, while the funds were used in construction projects or for land purchases in violation of banking rules, he said.
The bureau demanded that financial institutions correct their practices and submitted its findings to the Banking Bureau and the central bank, which are expected to impose fines soon, he said.
The commission said it has no plans to tighten home finance regulations by the end of this year and expects financial firms to comply with the rules.
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