...Stable Macro Environment: Fitch Ratings sees Taiwan's banking sector stability as underpinned by a sound monetary environment, ample system liquidity and resilient economy. We expect real economic growth to pick up slightly in the next few years, but indirect risks stemming from a China slowdown remain a key threat. Taiwan has only limited vulnerability to currency and liquidity risks arising from Fed tightening or sustained weak commodity prices. Fitch's Macro-Prudential Indicator for Taiwan is "1", indicating the lowest risk of systemic stress. Regulations Enhance Stability: Taiwan's banking system should remain resilient to threatening economic headwinds, due mainly to a healthy build-up of risk buffers. The regulator has imposed a 1.5% general provisioning for property and China exposure, instead of the usual 1% for all loans. It has imposed several macro-prudential measures in an effort to cool property market speculation and to moderate rapid growth in mainland China exposure (MCE)....
