To enhance the local financial sector’s understanding of the nature of recent global financial turmoil and the importance of risk management, Central Deposit Insurance Corp (CDIC) organized an international seminar on September 5th to share insights by experts from Switzerland, the US, Hungary and South Korea. Participants to the seminar included officials from the Financial Supervisory Commission and the Central Bank and representatives from domestic banks and Taipei-based foreign banks.
THE INTERNATIONAL SEMINAR STARTED WITH TWO KEYNOTE SPEECHES:
Fred Chen (陳上程), CDIC chairman, said that, following the US subprime crisis last summer, which triggered a global stock and property slump, governments and central banks in the world have taken actions to reform their own financial industries, attempting to enhance the sector’s strength in risk management. International financial organizations such as the Basel Committee on Banking Supervision and the Financial Stability Forum have also come up with suggestions and measures of “Enhancing (the financial) Market and Institutional Resilience,” addressing issues such as the management of collateralized mortgages and their supervision, accounting standards for financial institutions and the operation of rating agencies. He added that, the deposit insurance mechanism has an important role to play in the handling of problematic financial institutions, and hence how to improve the deposit insurance system’s function of avoiding financial crises or preventing such financial crises from spreading, is an issue that has increasingly attracted the attention of each country’s financial supervisory authorities as well as international organizations.
Founded in 1985, CDIC has aimed at safeguarding rights for financially unsophisticated depositors and helping maintain the nation’s financial orders, Chen said. The deposit insurer has also taken part in the nation’s financial reform by bailing out 54 domestic financial institutions, since 2001, Chen concluded.
During his address, Gordon Chen (陳樹), FSC chairperson, also stressed the importance of risk management in maintaining the financial market’s stability. He further shared his commission’s plan, which contains 217 projects, to build Taiwan into a regional financial hub. He said that for the past seven years, the local financial sector has been contributing to 10 percent of the nation’s domestic gross product (GDP), which, however, is relatively low compared to other countries. But the local government has earmarked financial industries to be the flagship pillar of expanding the nation’s service sector, which has taken up a 70 percent of the nation’s GDP. Chen added that his commission will help accelerate the sector’s integration in intellectual capital, that is, financial talents while adopting deregulatory measures to create a market without red tape for business management and transactions. His commission will also put forward measures that encourage financial institutions to upgrade their innovation and implement corporate governance in pursuit of business integrity and growth. In the infrastructure’s facilitation, Chen added that it has always been the government’s priority to help the financial sector to build a sound mechanism to manage and control financial risk as well as a well-intended exit system, which helps bail out failed financial firms.
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