In view of banks’ credit portfolios being over-concentrated on real estate loans, specifically newly extended housing loans in metropolitan Taipei during the second half of 2009, which undermined banks’ credit risk management, the CBC conducted moral suasion in October 2009 to urge banks to extend real estate loans in a more prudent manner. Furthermore, the CBC has introduced a series of targeted prudential measures on real estate loans since June 2010, aiming to further enhance banks’ credit risk management. In August 2015, the CBC relaxed several measures related to housing loans, given that several targeted macro-prudential measures on real estate loans have proven effective. In March 2016, the CBC further repealed most rules imposed on real estate loans (Table 1), except for high-priced housing loans, and urged financial institutions to strengthen self-discipline on credit risk management of real estate lending.

In recent years, banks’ real estate loans grew at a faster pace amid a buoyant housing market. In order to preclude excessive bank credit from flowing into the real estate market and to help banks enhance risk management of real estate lending, for the purpose of guiding sound banking operations and promoting financial stability, the CBC has adjusted targeted macroprudential measures five times since December 2020 (Table 2). Those measures have helped banks mitigate credit risk. In the future, with the aim of promoting financial stability, the CBC will continue to monitor the developments in the housing market, and review the effectiveness of targeted prudential measures so as to adjust related measures in a timely manner.