Taiwanese banks stung by TaiFX spike amid low loan pricing

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By Shruti Chaturvedi
05 Jan 2017

A jump in the cost of dollar funds at Taiwanese banks is causing concern in the syndications market even as the overall direction of loan pricing remains firmly downward. Bankers in Taipei said the situation could ease by the end of the first quarter but until then, they face the hard choice of settling for lower returns or seeing their loan books stagnate. Shruti Chaturvedi reports.

The Taiwan interbank US funding rate (TaiFX) spiked in the final quarter of 2016. And while it has come off the highs registered in December, the gap between TaiFX and Libor, at about 60bp, remains far wider than the 30bp-40bp zone that Taiwanese lenders are comfortable with.

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