How safe is your bank deposit in Taiwan?

Business Money
1

I couldn’t find a thread specifically on government insurance or guarantees of bank deposits in Taiwan, a relevant topic as the financial world collapses all around us during Shrub’s last semester slacking off in the Oval Office.

I’m looking for confirmation of whether or not foreign currency denominated accounts are covered. My understanding is that [color=#408040]they are insured (whether checking, savings, time deposit etc.) if they are in NTD, up to 1.5 million formerly and now 3 million NT. [/color] But then we get statements like this:

[quote=“Icon”][quote]The government announced it will guarantee all bank deposits [color=#0000FF]regardles
s of amounts or currency,[/color] [/quote][/quote]

…but…

That’s Icon quoting the China Post in another thread.

However, in the Taipei Times, we have:

[quote]Deposits to be guaranteed include current and time deposits, foreign currency-denominated deposits, inter-bank lending and negotiable certificates of deposit (NCDs) issued by the central bank, the director-general of the commission’s banking bureau, Chang Ming-daw (張明道) said.
[/quote]

So what’s the straight answer? Foreign currency accounts covered, or not?
Limit of 3 million NT, or no limit?

Very confusing.

2

This is a developing story, and hence, subject to changes.

However, from CENS via Taiwan Headlines

As to the fragility of the banks, there were some that we were warned already that were in the red and kind of sickly. Those are the most vulnerable to market trends, and therefore, the ones most likely to topple over with any gust of wind, let alone this global earthquake.

3

DB, I was at the stock exchange today and some of the analysts there told me that the “we’ll insure any amount” think was under discussion at the Legislative Yuan. They told me the 3 million NT coverage is already inked.

As for foreign currency, I have no idea but I assume it is covered as well. There are many banks that allow you to have several currencies in a single account, you know? It doesn’t make sense to cover the NT but not the others.

Call your bank and pester them, or send Sat TV a PM. I think he’ll know.

4

I think the FSC has the power to decide this without authorization from the Legislature.

5

From the Taipei Times:
taipeitimes.com/News/front/a … 2003425342

[quote]Bank savings given blanket guarantee

HELP: The Financial Supervisory Commission assured the public that the nation’s deposit insurer has enough capital to bail out defaulting banks should the need arise
By Joyce Huang And Shih Hsiu-Chuan
STAFF REPORTERS
Wednesday, Oct 08, 2008, Page 1
Premier Liu Chao-shiuan (劉兆玄) said yesterday that the government would provide a blanket guarantee for all depositors’ savings in state-owned or private banks. This followed the announcement by the financial regulator of a NT$3 million (US$90,000) threshold a day earlier.

“It’s important we should be confident in the economy. Depositors at domestic banks should not be scared. The government will protect savings, ask banks to increase their deposit-reserve rate, and ask the Financial Supervisory Commission [FSC] and the central bank to stabilize the market” Liu said.

Liu made the remarks when questioned by Chinese Nationalist Party (KMT) Legislator Lu Shiow-yan (盧秀燕) at yesterday afternoon’s legislative session.

The blanket guarantee’s effective duration, however, is yet to be decided, pending final Cabinet approval. The duration will be announced in a day or two, FSC Vice Chairwoman Lee Jih-chu (李紀珠) told a media briefing late yesterday evening.

“The move is a preventive measure to restore confidence and calm panicked depositors, who won’t have to worry about bank runs any more or make unnecessary withdrawals creating unnecessary liquidity problems for banks,” Lee said.

The blanket guarantee’s effective duration will, theoretically, be shorter than the deadline for the NT$3 million guarantee at the end of next year, she said.

Should any bank fail during the guarantee period, the government will step in to ensure all bank savings, while reshuffling bank management, she said.

Deposits to be guaranteed include current and time deposits, foreign currency-denominated deposits, inter-bank lending and negotiable certificates of deposit (NCDs) issued by the central bank, the director-general of the commission’s banking bureau, Chang Ming-daw (張明道) said.

The commission yesterday assured the public that the nation’s deposit insurer has enough capital to bail out defaulting banks since its annual revenue incomes from the 2 percent financial business taxes and premiums total between NT$22.5 billion and NT$24.5 billion, Chang said.

On Monday, the FSC issued an emergency statement saying that the government would temporarily raise protection for bank depositors from the statutory NT$1.5 million to NT$3 million until Dec. 12, next year.

That NT$3 million protection will remain valid once the blanket guarantee is annulled, he said.[/quote]

6

Looks good then. It’ll bear watching how much is in ink and how much is assurances. I’ve already pulled my USD cash and sent it to my broker stateside, poised like a vulture awaiting an opportunity for a killing there. But thanks guys!

7

Big bruhaha on the news last night regarding this new development.

One of the panelists in a talk show underscored the main point like this: if I have a coild, and I go to the foctor, and the doctor sends me to intensive care unit immediately, I would panic because I would think I have something really serious, not just a cold. Such is the case with this issue.

Another panelist stressed her point saying the biggest bank chaipersons had a meeting Friday and assured the public everything was A-OK. However, the Government makes this announcement now and what else can the public think other than this problem does not affect small banks only but it is rather one of the big ones that’s in dire straits?

8

Uncle llary is just watching amused at the over-inflated chaos and riding the waves of high interest deposits. Citibank is paying 5% now for 3 month NT$ deposits.