The state-run Central Deposit Insurance Corp (CDIC, 中央存保) aims to offer insurance coverage to banks that are performing well at no cost after the CDIC's funds reach NT$200 billion (US$6.15 billion).
This proposal is aimed at addressing what some call an unfair situation in which there is not much difference between the premiums paid by troubled banks and those that perform well, a CDIC official said yesterday.
"Large-sized financial institutions are currently paying between NT$100 million and NT$200 million in insurance premiums to the CDIC each year," Johnson Chen (
PHOTO: LAN CHUN-TA, TAIPEI TIMES
"These institutions would be able to save their money if they reached the CDIC's standards, such as having a capital adequacy ratio higher than 10 percent, a non-performing loan ratio lower than 5 percent and profitability that meets the market average," he said.
After taking over five debt- ridden banks this year -- the Enterprise Bank of Hualien (
Chen said that because of the insufficient funds available for financial restructuring, the CDIC was covering 80 percent of the payments to buyers taking over debt-ridden banks, while the government's financial restructuring fund was paying the remaining 20 percent.
The government financial re-structuring fund is expected to come to an end in 2010 after it resolves the takeover of the nation's seven ailing banks, he said.
"Approximately NT$4.4 billion of the CDIC's funds comes from the insured institutions' annual premiums," Chen said.
"Two percent of the business tax for financial services will be injected into the CDIC's funds beginning in 2011 and is estimated to come to about NT$17 billion each year, accumulating NT$21.4 billion annually," Chen said. He estimates that starting from 2011, it would take the CDIC 10 years to reach its goal of NT$200 billion in 2021.
Beginning July 1, the nation's depositors will be able to receive NT$1.5 million maximum in insurance coverage per insured institution under the amended Deposit Insurance Act (
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS