Financial Crime World

Financial Stability in Taiwan: Key Measures Taken by the Financial Supervisory Commission

The Financial Supervisory Commission (FSC) of Taiwan has taken various measures to maintain financial stability and address potential risks. Here are some key points from a recent report highlighting these efforts:

Stress Testing for Domestic Banks

  • The FSC conducted a stress test on 37 domestic banks, which showed that all banks had sufficient capital adequacy ratios under both mild and relatively serious scenarios.

Overcoming Challenges: Chaoyang Life Insurance Co., Ltd.

  • In January 2016, the FSC took over Chaoyang Life Insurance Co., Ltd. due to financial difficulties.
  • After two auctions, Nan Shan Life Insurance Co., Ltd. acquired the company, demonstrating the FSC’s ability to resolve troubled institutions.

Strengthening Solvency and Risk Management

  • The FSC introduced an external reviewing actuary system for the insurance industry to improve solvency and risk management.
  • The ORSA (Own Risk and Solvency Assessment) mechanism was also implemented to enhance risk assessment and management capabilities.

Enhancing Cyber Security

  • The FSC required financial institutions to implement stronger cyber security measures after several securities companies suffered DDoS attacks.
  • This move aims to protect against potential cyber threats and maintain the integrity of Taiwan’s financial system.

Public Tender Offer System: Strengthened Regulations

  • The FSC introduced amendments to the regulations governing public tender offers, including:
    • Requiring offerors to provide proof of their financial capacity
    • Increasing information disclosure requirements for a more transparent process

These measures demonstrate the FSC’s commitment to maintaining financial stability in Taiwan and addressing potential risks. By implementing stress testing, solvency and risk management, cyber security, and strengthened public tender offer systems, the FSC aims to ensure a robust and secure financial environment for Taiwanese citizens and businesses.