The Financial Supervisory Commission yesterday denied a local media report that it had finalized a policy proposal to extend the deadline of its blanket deposit guarantee to the end of next year.
“We are still studying the local banking sector’s liquidity level and no conclusion has been reached,” commission chief secretary Lu Ting-chien (盧廷劼) told a media briefing yesterday.
The commission has set no timetable for when such an extension proposal would be finalized, he said.
“The commission believes the policy has worked effectively to maintain depositors’ confidence and the sector’s stability [in the past year], but the question is whether such a confidence level can be sustained till next year [after the policy expires],” he added.
The Chinese-language Commercial Times, citing an anonymous commission official, yesterday reported that the commission planned to extend the blanket deposit guarantee for another year — a proposal to be finalized by next month at the earliest, as most Asian governments were doing the same.
Hwang Dar-yeh (黃達業), a member of the Central Deposit Insurance Corp’s (CDIC, 中央存保) consultant committee, yesterday confirmed that the deposit insurer and its committee had one month earlier voted for the extension proposal, which has been delivered to the commission as a reference.
“Although we believe that the local banking sector’s liquidity is not a problem, our conclusion was that depositors’ money should be fully insured to maintain the nation’s financial stability,” Hwang said over the phone.
With or without the government’s blanket guarantee, the CDIC has already taken out insurance premiums on local banks that will insure all bank deposits, said Hwang, who is currently director of the Center for the Study of Banking and Finance at National Taiwan University.
However, Hwang expressed concern that such a policy could theoretically leave room for moral irregularities or distort market discipline.
Jonathan Lee (李信佳), senior director of the financial institutions group at Fitch Ratings Ltd’s Taiwan branch, yesterday said the extension policy was an important lifeline to some under-performing banks.
“Once the [lifeline] is removed, it is hard to say if any of these [under-performing] banks would run into difficulty,” he said over the phone.
Unevenly distributed liquidity is the biggest problem facing the domestic banking sector, with top-tier and state-run banks having absorbed most of the nation’s deposits, he said.
Lee urged the regulator to keep an eye on banks whose capital adequacy ratio falls below 10 percent, instead of just the statutory 8 percent level, and intervene if necessary to improve their health by requiring shareholders to beef up bank capital.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by