After calculating 2019 systemic importance scores for Taiwan’s domestic banks, the FSC recently designated First Commercial Bank as Taiwan’s sixth domestic systemically important bank (D-SIB). The FSC had previously designated five other banks (CTBC Bank; Cathay United Bank; Taipei Fubon Commercial Bank; Mega International Commercial Bank; and Taiwan Cooperative Bank) as D-SIBs in December 2019.
D-SIBs are banks that occupy a dominant position in financial markets. The FSC hopes that Taiwan’s six D-SIBs can shoulder more responsibility for financial stability, and show a greater sense of mission on this front. In terms of business expertise, ethical behavior, and corporate governance, D-SIBs are called upon to set an example that leads the entire banking industry toward greater stability and soundness. Taiwan continues working to bring its bank capital adequacy requirements more closely in line with international rules. Increasing the loss-absorbing capacity of the D-SIBs should do much to ensure greater financial stability in Taiwan.