Annual premium income is expected to double to NT$8 billion (US$241 million), if we go for the first option with rates starting at 0.03 percent, while the amount would grow by only 50 percent to NT$6 billion with rates starting at 0.02 percent.
The reserve would increase to NT$200 billion in 10 years from the present NT$15.1 billion. Yet the final decision depends on further discussions with the industry.
TT: Some foreign banks in Taiwan have voiced opposition to the change and claimed the new system was unfair to them, considering their small, yet rich customer bases are made up of corporate accounts containing huge deposits. They claim the change could lead to enormous increases in premium cost. What's your opinion?
Chen: We are fully aware of the situation. The dissidents are a minority and mainly foreign wholesale banks whose deposits are mostly foreign funds used to invest in the local stock market. But the deposit insurance system underpins the stability of the banking sector, and no one should enjoy these benefits for free. We will continue to communicate with them to reach agreement.
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