Taiwan’s finance ministry said on Monday it will urge major local banks to delay margin calls on investors, in hopes of putting a brake on the tumbling stock market.
Finance minister Chang Sheng-ho told lawmakers in a parliament session that the ministry will urge eight state-run banks to delay any demands on investors to deposit additional money to cover the loans. No further details were immediately available.
Taiwan’s main TAIEX index.TWII> tumbled nearly 6 percent on Friday and Monday combined, reflecting worries about the deepening euro zone debt crisis, fears of a global economic slowdown and concerns about the impact of a local capital gains tax plan.
Margin loans are loans taken to finance the purchase of equities in hopes the stocks will rise.
The index has slumped more than 10 percent over the past month, grabbing the bottom eighth spot among the world’s 30 major indexes, according to Reuters data.