03.23.2001
MoF mulling new scheme to help the unemployed (and banks too...)

• As the economy wanes, the Ministry of Finance (MoF) is considering the possibility of allowing unemployed persons to roll over their mortgage debt, perhaps for six months. Any interest incurred will be accrued to the principal amount and then repaid.

• The government raised the possibility at the beginning of March. While it would emulate the debt restructure procedures for ordinary enterprises, the target would be unintentional unemployed individuals only. The upper limit for the scheme will be discussed next week.

• The seven major banks, including Chang Hwa Commercial (2801 'Zhang Yin'), First Commercial (2802 'Yi Yin') and Hua Nan Commercial (2803 'Hua Yin'), own more than 70% of total mortgage loans in Taiwan. Some mortgages are located in Tainan and Taichung where property prices have tumbled.

• The scheme will benefit banks by allowing for some ‘improvement’ of their balance sheets.

WilliamFong@Primasia.com +886-[0]2-2547-8864