This is mainly supported by high levels of corporate profits, accommodative financial conditions, and steady demand for medium- to long-term strategic investment and for investment by the nonmanufacturing sector, both of which are relatively unsusceptible to changes in overseas demand and the business cycle. Going forward, business fixed investment is expected to increase moderately.
Credit risk premium is used to cover expected loan loss and the expected loan loss rate equals default rate multiplied by loan loss rate. To estimate loan loss, commercial banks must set up internal rating modes. The longer the loan’s maturity, the higher the lendings rate.