TAIPEI (TVBS News) — A legislator from Taiwan's ruling Democratic Progressive Party (DPP, 民進黨) has introduced legislation that would double the firepower of the island's market intervention mechanism amid growing economic uncertainties. The proposal, submitted Friday (April 11) by a party representative, would increase the maximum deployable capital of the National Financial Stabilization Fund (國安基金), Taiwan's sovereign market stabilization vehicle, from NT$500 billion (US$15.2 billion) to NT$1 trillion (US$30.5 billion). The initiative emerges just days after officials activated the fund, with critics questioning whether its current resources can effectively influence a stock market where daily trading regularly reaches between NT$400 billion and NT$500 billion (US$12.2 billion to US$15.2 billion).
DPP Legislator Kuo Kuo-wen (郭國文), a member of Taiwan's parliament representing the ruling party, pointed to dramatic changes in market scale since the fund's creation a quarter-century ago. Kuo noted that Taiwan's equity markets have expanded from NT$8 trillion (US$244 billion) to more than NT$70 trillion (US$2.13 trillion) in total capitalization, representing a ninefold increase. The lawmaker argued that this explosive growth necessitates corresponding increases in the stabilization fund's capacity to effectively influence market sentiment, proposing specific changes to the statute governing the fund's operations and management.
The proposed legislation would eliminate existing borrowing restrictions on the fund's two main financing channels, providing greater operational flexibility during market interventions. Under current regulations, the stabilization mechanism can leverage up to NT$2 trillion (US$61 billion) by using government-owned equities as collateral and can access up to NT$3 trillion (US$91.5 billion) from Taiwan's postal savings system, which serves as a significant reservoir of public capital in the island's financial infrastructure. ★