Officially implemented in
February 2000, the system is
used by insured institutions
to report daily the amounts
of deposits and loans, loans
to related parties, unsecured
loans, andothermajorbusiness
items. In the event of warnings
of abnormalities, the CDIC
can promptly take necessary
measures to prevent a major
business crisis at the insured
institution.
(4) Provision of Guidance and
Resolutionof Problem Insured Institutions
A. Helping Insured Institutions CalmBank Runs
In the 1990s, Taiwan experienced a series of bank runs. To properly respond to and
effectively quell such incidents, the CDICworked with theMOF and the Central Bank to
jointly formulate the “Guidelines forAssisting Insured Institutions inDealingwithBankRuns”
and “BankRunResponseMeasures” in1992. Theguidelines have sinceprovided abasis for
coordinating the work platforms, emergency financial assistance and other mechanisms of
related units. The CDIC has thus been able over the years to properly and effectively calm
bank runs, restoredepositor confidenceand stabilize the financial order.
B. Establishing and Strengthening Mechanisms for the Resolution of Problem Insured
Institutions
In December 1991, the CDIC set up a Review Committee for the Resolution of Problem
Insured Institutions. The committee’s purpose was to effectively handle problem insured
institutions facing business crises and strengthen the response capacity and resolution
techniques of the CDIC in such cases. The committee reviews the resolutionmeasures for
individual problem insured institutions and other major financial incidents. The committee
also later formulatedguidelines on business guidance for insured institutions, the issuance
of warnings to insured institutions, and the announcement of termination of status as an
insured institution to createmechanisms for the resolutionof problem financial institutions.
28
Central Deposit Insurance Corporation 30Years inRetrospect
