In order to respond to the return to a system of limited deposit insurance coverage after the current provision of full deposit insurance coverage expires on December 31 at the end of this year, the Financial Supervisory Commission of the Executive Yuan, the Ministry of Finance and the Central Bank on August 12, 2010 announced that “The maximum deposit insurance coverage amount will be raised to NT$3 million starting from January 1, 2011.” This policy will result in the ratio of deposit accounts that are fully covered by deposit insurance rising to 98.6%. That is, the vast majority of the depositors will be fully covered by deposit insurance.
In order that the measure currently in force of full deposit insurance protection can be successfully withdrawn at the end of this year, the government has not only raised the amount of the deposit insurance coverage for each depositor in each financial institution participating in deposit insurance to NT$3 million, but has also been reviewing amendments to the Deposit Insurance Act in order to bring foreign currency deposits as well as the deposit interests within the scope of the deposit insurance coverage.
To ensure the sound operations of financial institutions, every effort has been made to strengthen the supervisory measures adopted during the period of full deposit insurance coverage. These measures include strengthening the corporate governance, internal controls and internal audit mechanisms of financial institutions, strengthening the management of capital adequacy, financial soundness and the management of liabilities of financial institutions, ensuring the financial institutions with adequate funding liquidity, and strengthening the implementation of prompt corrective actions. The above- mentioned supervisory measures will be still adopted continuously beyond the period of full deposit insurance coverage. Furthermore, to strengthen its ability to undertake risk, the Central Deposit Insurance Corporation has already drafted a proposal for adjusting the deposit insurance premium rate, in order to speed up the accumulation of the deposit insurance fund.