Weakness in the U.S. subprime mortgage sector has forced Asian regulators to assess the levels of risk their banks face, reports The Wall Street Journal. Taiwanese officials found that 16 of 42 local banks have at least minimal exposure to bonds backed by U.S. subprime mortgages. Subprime exposure in Hong Kong will likely be minimal according to Joseph Yam, chief executive at the Hong Kong Monetary Authority.
Taiwan Life Insurance recently reported a loss of NT$428 million ($13 million) in the first half of the year following investments in a Bear Stearns hedge fund. Analysts warn that Taiwanese banks may have further exposure to the subprime market in the collateralized debt obligations market.
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