Trump’s Tariff Policy Impacts the Globe
The Financial Supervisory Commission (FSC) and the Central Bank face public grievances head-on, while Peng Jinlong stated that there is no “head-cutting tide” among young people, with most victims being over 40. He also mentioned that the continuation of the short-selling ban will be announced on Saturday.
Background Summary
Recent declines in the Taiwan stock market have sparked discussions among foreign netizens: “Can this still be played like this?” What is the difference between this and the U.S. stock market circuit breaker?
Is the housing market on the brink of collapse? The plummeting Taiwan stock market has led to a surge in those looking to “sell their homes to save their stocks,” resulting in an overwhelming number of mortgage-related calls.
Public Outcry Over Recent Stock Market Crash
The recent crash in the Taiwan stock market has elicited public outcry. Today (the 10th), during a session of the Finance Committee, Peng Jinlong of the FSC responded to legislators’ inquiries, clearly stating that there are no signs of a “bear market” in the Taiwan stock market. He pointed out that the decline is still a normal correction and remains within controllable economic parameters. He also clarified negative rumors regarding the “young stock gods,” stating that the main individuals experiencing liquidation are mostly investors over 40 years old.
FSC: Closely Monitoring Taiwan Stock Market
In response to Legislator Lai Shiba’s question regarding the “bear market” claim, Peng Jinlong firmly stated that, according to economic logic, the Taiwan stock market does not meet the criteria for a bear market but is instead experiencing a normal correction. Legislators responded that the FSC is hesitant to make judgments about the economic situation and its cyclical nature.
Regarding the recent sharp decline, amidst rumors of investors massively borrowing funds and even using insurance policies and real estate to “sell homes to save stocks,” Peng Jinlong indicated that the FSC is closely monitoring the credit and lending risks related to the Taiwan stock market. He noted that data shows little correlation between the so-called “young people’s liquidation tide” and the actual victims:
“We have observed that the trading volume in the past two days is normal; it is difficult to theoretically classify this as a ‘bear market’… Our data indicates that around 70% of those liquidated are in the age range of 40 to 69, which does not align with your trend of a larger number of young people.”
Measures to Address the Taiwan Stock Market Crash
Regarding the systemic and overall risks of the Taiwan stock market, Peng Jinlong stated that the FSC has already implemented relevant measures to safeguard the market. This includes the relaxation of regulations starting from the 7th, allowing investors to provide various collateral for margin calls with the approval of securities finance businesses or brokers, including the margin difference for financing down payments defined by the industry.
As for whether real-time cooperation between banks, the stock exchange, and brokerage firms will lead to funding flow issues, Peng Jinlong indicated that he has urged the stock exchange and relevant units to accelerate improvements:
“Currently, it appears to be within controllable limits, and it will not lead to a systemic storm. We will pay close attention, especially in the coming days.”
When Will the Short-Selling Ban Remain in Effect?
Regarding how long the short-selling ban will remain in effect, Peng Jinlong stated that returning the market to normal is the FSC’s primary goal. However, considering the various conditions in the current market, the FSC will evaluate the international markets after the expiration of the short-selling ban on April 11 and will announce on Saturday (April 12) whether an extension is necessary.
Response from Finance Minister: Discussion on Increasing National Security Fund
In response to queries about the National Security Fund, DPP legislator Guo Guowen questioned the data, stating that the National Security Fund’s market share of 500 billion has been diminishing over time. He raised concerns about whether the government and the National Security Fund still have the capacity to continue supporting the market in case of future issues, especially given the market capitalization of 73 trillion for the Taiwan stock market.
In response, Finance Minister Zhuang Cuiyun addressed the issue directly, stating that there has been an ongoing assessment of whether the National Security Fund’s scale is sufficient, and relevant details will be disclosed at an appropriate time.
