Expanding the National Stabilization Fund, which has NT$500 billion (US$16.2 billion) in capital, would be unnecessary, as the fund has in the past spent no more than NT$120 billion, the Ministry of Finance said yesterday.
The government has activated the fund six times, but has never spent more than its limit, with the highest spending totaling NT$120 billion, Minister of Finance Su Jain-rong (蘇建榮) told reporters on the sidelines of a meeting at the Legislative Yuan in Taipei.
Hence, the ministry has no intention of expanding the fund, as proposed by lawmakers, but would not decrease it either, as global financial markets have become more volatile, Su said.
Democratic Progressive Party Legislator Wang Jung-chang (王榮璋) agreed with Su, saying that investors would feel pessimistic about the local stock market if the government expanded the fund.
The fund’s NT$500 billion in capital is comprised of NT$200 billion in loans from the nation’s financial institutions, with shares of state-run banks used as collateral, and NT$300 billion in loans from four government-run funds: the Civil Servant Pension Fund, the Labor Pension Fund, the Labor Insurance Fund and the Postal Savings Fund, the ministry said.
Lawmakers have proposed increasing the loans from the four government-run funds, leaving loans from financial institutions unchanged, but they have disagreed about whether to increase or decrease the size.
A team led by Chinese Nationalist Party (KMT) Legislator William Tseng (曾銘宗) said given that the volatility of global financial markets is rising, it proposed to expand the size of loans from four funds to NT$800 billion, increasing the fund to NT$1 trillion.
However, other lawmakers, including a team led by KMT Legislator Alicia Wang (王育敏) and another led by KMT Legislator Lin Te-fu (林德福), called for a reduction of the fund, saying that the government should not borrow money from government-run funds just to stabilize the stock market.
If the government does not need so much capital, it should not take loans from the four state-run funds at all, as Taiwanese would not be pleased if their labor pensions are put into the stock market, Lin said.
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