The Financial Supervisory Commission (FSC) on Thursday said the fundamentals of local banking, brokerage and insurance sectors remain sound, after the IMF warned this week about potential liquidity risks in global markets.
In its latest Global Financial Stability Report issued on Tuesday, IMF said market liquidity would probably shrink once interest rates rise and a liquidity shock in one economy could spill into other economies, exacerbating market volatility and financial instability.
Banking Bureau Deputy Director-General Jean Chiu (邱淑貞) said at a news conference that it is not the case in Taiwan, as liquidity remains high in the local banking sector.
The Basel Committee on Banking Supervision in 2013 announced that banks must have a sufficient amount of easy-to-sell assets, equal to or greater than their net cash outflows over a 30 day period in case of a stress scenario.
Therefore, banks should achieve a liquidity coverage ratio (LCR) of at least 60 percent under the regulatory framework, known as Basel III, and improve the figure by 12 percentage points annually until reaching 100 percent by 2019, Chiu said.
“The nation’s banks are well ahead of schedule in meeting guidelines set by the accord, as their LCR currently averages about 119 percent,” Chiu said.
In addition, the minimum liquidity ratio for domestic banks has surpassed the central bank’s requirement of 10 percent to average 30.29 percent, Chiu added.
The ratio refers to the proportion of liquid assets that a bank holds as reserves, excluding deposits with the central bank.
Once monetary policies normalize, the FSC said interest rates are expected to climb, which would bring benefits to insurance companies’ fixed income earnings and improve their net interest margins.
“It will also prompt insurers to design more competitive products, boosting their premiums,” Insurance Bureau Deputy Director-General Shih Chiung-hwa (施瓊華) said.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last