The head of the nation’s largest financial group has suggested regulators adopt withdrawal curbs to save local banks from the type of collapses in public confidence that have rocked global markets in the past few weeks.
Cathay Financial Holding Co (國泰金控) president Lee Chang-ken (李長庚) warned of the increased risk lenders face of rapid bank runs in an age of social media and digital banking.
“NT$1.3 trillion [US$42 billion] was withdrawn from Silicon Valley Bank in less than 48 hours,” Lee said at the company’s earnings briefing in Taipei on Wednesday. “If that happened in Taiwan today, any bank it happened to would die.”
Photo: Wu Hsin-tien, Taipei Times
Lee said that equity markets can impose restrictions on trading to protect listed companies and suggested a “fuse mechanism” to protect banks when they face liquidity crises.
He said he was just “throwing the idea out there” for everyone to discuss.
The Financial Supervisory Commission declined to immediately comment.
Lee’s concerns echoed remarks from Citigroup Inc chief executive officer Jane Fraser on Wednesday, who cited mobile banking as a “game changer” for lenders in the face of client worries about their deposits.
The unease among senior bankers comes after weeks of turmoil in global financial markets triggered by the collapse of SVB Financial Group and several other smaller US lenders.
“We all need to think about this problem,” Lee said. “If this can happen in the US, it can happen in Taiwan.”
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