Lacking sufficient manpower for financial examinations, the Central Bank enacted the
"Regulations Governing the Central Bank's Commissioning the Examination of Community
Financial Institutions to Taiwan Cooperative Bank" and included Taiwan Cooperative Bank
(TCB) among institutions in charge of conducting financial examinations. In 1985, the CDICwas
established and empowered under Article 21 of
theDeposit InsuranceAct
to carry out financial
examination of insured institutions to effectively control insurance risk. Accordingly, the CDIC
has beenmandated since 1987 to conduct financial examinations of the six types of insured
institutions, includingdomesticbanks, trust and investment corporations, credit cooperatives, and
the credit departmentsof farmers' and fishermen's associations,making it oneof four institutions
in charge of performing financial examinations in Taiwan alongwith theMOF, the Central Bank,
and theTCB.
In July 1996, following the crisis of the Fourth Credit Cooperative of Changhua City in 1995,
the government adjusted the division of duties in financial examination to strengthen the
financial supervisory system. The CDIC assumed TCB's original duties of financial examination
for community financial institutions and their shared computer centers, rapidly increasing the
number of institutionsexaminedby theCDIC from82at theend1995 to396 inJuly1996.
3. PeriodofMandatoryParticipation
(Jan. 1999~Dec. 2006)
(1) Background
In the second half of 1995, Taiwan
experienced a series of runs at
community financial institutions
that spilled over to other less
operationally sound financial
institutions. This brought to the
public’s attention the need to
improve the financial regulatory
system and strengthen deposit
insurance funct ions. At the
directionof theExecutiveYuan, the
MOF and the Central Bank began
in August 1995 to discuss ways to
improveTaiwan’sdeposit insurance
system. These talks culminated
22
Central Deposit Insurance Corporation 30Years inRetrospect
