Taiwan (ROC): Central Deposit Insurance Corporation

In September 2008, the failure of a large Taiwanese bank led depositors to shift billions of dollars from private banks to state-owned banks. To stem the runs, the government on October 7 invoked its authority under Articles 28 and 29 of the Deposit Insurance Act to announce a temporary, unlimited guarantee on all deposit accounts of institutions covered by the Central Deposit Insurance Corporation (CDIC). In addition to removing the previous TWD 3 million (USD 90,000) cap per depositor, the expanded coverage included several types of deposit accounts that had not been previously insured by the CDIC. As the CDIC's deposit insurance fund was fully depleted at the time, the government would have had to identify alternative financing if any banks had failed. The program was initially set to expire on December 31, 2009, but the government extended it by a year due to ongoing economic turmoil related to the GFC and international competition. As of year-end 2009, the CDIC insured TWD 910 billion in eligible accounts at 383 institutions. The CDIC did not pay out any claims under the expanded program.