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Fitch says Taiwanese banks on track to meet Basel III requirements

Fitch says Taiwanese banks on track to meet Basel III requirements

(9 May 2016 – Taiwan) Fitch Ratings has said that Taiwanese banks are on track to meet the phased-in Basel III capital requirements and have adequate capital as buffer against economic challenges ahead.

In a newly released report, the ratings agency said the Taiwanese banking sector's capitalisation is better than it appears and is not highly leveraged, as a result of tougher rules on core capital eligibility and conservative risk-weighting.

The report compared exposure risk-weight across various jurisdictions, highlighting differences arising from using the standardised and internal-ratings-based approaches.

Taiwanese banks have accumulated adequate capitalisation, with a few state banks requiring additional capital to meet 2019 Basel III requirement.

Fitch has said that the regulator's proactive approach in imposing prudential measures, such as helping Taiwanese banks to build capitalisation buffers.

Measures include an offshore capital buffer of £200 billion (A$391 billion) as well as additional capital charges and additional provisions on China exposure and mortgages.

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