Premier Sean Chen (陳冲) said yesterday that domestic financial institutions had only a limited direct exposure to euro-denominated debt of about NT$23.3 billion (US$780.16 million), accounting for just 0.07 percent of local financial firms’ total assets.
“It seems that any potential negative impact of such an exposure is still manageable,” Chen said at a meeting of government agencies in the aftermath of Sunday’s parliamentary elections in Greece.
Chen said he expected the European debt crisis to reach its peak in the latter part of the year and he pledged that his Cabinet “would continue to closely watch the eurozone financial situation.”
He also said that the slow pace of the US’ economic recovery was not strong enough to stimulate the global economy, creating in turn a challenging environment for Taiwan’s economy.
“The Cabinet will have to adopt a cautious attitude toward the global economic situation and the domestic economy,” he said.
Chen asked the Financial Supervisory Commission to promote timely measures to stabilize the financial situation and stock market and he asked domestic institutions to solidify their ability to cope with risk.
The premier also asked the central bank to adopt appropriate currency policies and maintain order in the foreign exchange market to keep the New Taiwan dollar’s exchange rate stable.
In response, central bank Governor Perng Fai-nan (彭淮南) said the bank would ensure adequate market liquidity.