Taiwan Banks' Subprime Losses Increase 26%

Investment losses at Taiwanese financial institutions from U.S. subprime and structured investment-vehicle assets increased 26 percent in February, the Taipei Times reported, citing the financial regulator.

The losses rose to NT$31.3 billion ($1.03 billion) from January's NT$24.9 billion, the Taipei-based, English-language newspaper said.

Exposure to subprime investments and SIV assets declined to NT$71.2 billion and NT$19.3 billion in February, from NT$75 billion and NT$21.2 billion the previous month, the newspaper said, citing Susan Chang, vice chairman of the Financial Supervisory Commission.

Banks and hedge funds set up SIVs to issue short-term debt and invest in longer-term assets such as bank loans and mortgage- backed securities, which have dropped amid the subprime crisis and may prompt investors to post losses.

This is an extract from
Asian Banking and
Finance Magazine.

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