The Financial Supervisory Commission launches inter-industry inquiries on banks and securities companies to prevent blockage of four loans under one roof

FSC. (File photo)

[Reporter Wu Xintian/Taipei Report] In order to prevent excessive leverage risks in the "four loans under one roof" of housing loans, credit, car loans and stock pledges, the Financial Supervisory Commission today announced the promotion of a cross-industry credit information inquiry mechanism between the securities industry and the banking industry. Banks and securities firms can inquire about each other's customers' credit information through the exchange mechanism of the joint loan center and the stock exchange.

The Financial Supervisory Commission pointed out that from October 31, on the bank side, as long as the purpose of the funds for a new personal loan case is "investment and financial management", the bank must inform in advance and obtain the customer's consent to inquire the customer's balance of four types of loans on the securities dealer side, including margin financing and securities lending, securities business lending, securities lending and unlimited-purpose lending. The information obtained from bank inquiries is for reference only. Credit granting must still be based on the "5P Principles" and a comprehensive assessment of the customer's credit status, fund usage and repayment ability, and prudent handling.

The brokerage side will be applicable from the first business day on November 2. If the credit limit between an individual natural person and a securities firm reaches NT$300 million, or 1% of the securities firm's net worth (whichever is higher), the securities firm can query the customer's four types of loan balances in the bank, including real estate, personal property, corporate investment and working capital, after clearly informing and obtaining the customer's consent. The Financial Supervisory Commission emphasized that this credit mechanism only applies to newly undertaken loan cases. Old credit cases are not subject to this limit if there is no new limit; if the customer does not agree, the credit investigation cannot be carried out.

As for the two-way data update frequency between banks and securities companies, banks use monthly data and securities companies use daily data. The Financial Supervisory Commission explained that the overall risk is still within the controllable range, and the full picture of customer funds can still be grasped in terms of credit reporting.