US regulators yesterday were set to give nervous insurance companies, mutual funds and other big players in financial markets a better idea of whether they will be tapped for the same type of additional government scrutiny facing large US banks.
None of these industries are eager to be on the receiving end of the added attention that comes with being named “systemic” and have spent the past year lobbying to be ignored.
The concern is that new scrutiny will mean new restrictions that could hit firms’ bottom lines.
Yesterday, the US Financial Stability Oversight Council was scheduled to release a new proposal on how it will determine which non-bank firms are important enough to the financial system that they merit greater oversight by the Federal Reserve.
Also yesterday, banking regulators are scheduled to vote on a proposal banning most proprietary trading done by banks, known as the Volcker rule.
Both rules are highly anticipated parts of last year’s Dodd-Frank financial oversight law.
Companies that are tapped for greater Fed supervision will be designated systemically important financial institutions (SIFIs) and will be subject to new capital and liquidity rules.
They will also be required to draft detailed plans on how they could be broken up if the company falters and is seized by the government.
The SIFI rule is in large part a response to the market havoc caused during the 2007 to 2009 financial crisis by American International Group Inc, an insurer not overseen by banking regulators.
Bank holding companies with more than US$50 billion in assets, such as Goldman Sachs and JPMorgan Chase, are automatically subject to the added scrutiny.
In another area of critical importance to major financial players, the board of the Federal Deposit Insurance Corp was to officially release yesterday a proposed version of the Volcker rule.
The rule aims to prevent banks from recklessly engaging in risky trades by prohibiting them from trading for their own profit in securities, derivatives and certain other financial instruments.
The law contains some exemptions to the ban for trades done to make markets for customers and for those used to hedge against certain risks.
How these exemptions are crafted will have a major impact on large banks such as Goldman and Morgan Stanley.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$10.26 billion to finance the construction of its second fab in Kumamoto, Japan, and a second fab in Arizona, using advanced process technologies. The Department of Investment Review approved TSMC’s investment applications on the basis that Taiwan remains a major technology and manufacturing hub for the chipmaker, which makes its most advanced chips at home, the company operates its research-and-development center here and the majority of its capacity remains in Taiwan. The latest capital injections — US$5.26 billion for its Japanese venture Japan Advanced Semiconductor Manufacturing
DIVERSIFYING: Following customers’ demand to improve supply chain resilience, ASE is looking for sites in the US, Japan and Mexico, a company executive said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it plans to launch a new high-end chip testing fab in the US next month to better serve its key customers based in North America, particularly California-based artificial intelligence (AI) customers. The new US testing facility would be operated by the firm’s subsidiary ISE Labs Inc, it said. ASE’s major customers, and high-ranking US officials and representatives from American Institute in Taiwan are to attend the fab’s opening ceremony on July 12, it said. ISE Labs last year acquired a 5,942m2 facility in San
Local companies believe that nearly a third of all job opportunities will vanish in 10 years due to the rise of artificial intelligence (AI), according to a survey released by online job bank yes123 on Tuesday. In the survey of 1,016 companies on the labor market’s third quarter outlook, the job bank focused in part on AI’s impact on workers and asked companies what percentage of jobs they felt would be lost to AI’s round-the-clock productivity and high-speed computing prowess. Respondents felt on average that 29.2 percent of job opportunities would be lost to AI over the next 10 years, but there
Taiwanese workers earned an average of NT$47,000 per month this year, but 40 percent are struggling financially and 18 percent plan to switch jobs within 12 months, two separate surveys showed yesterday. The amount equals a 5.4 percent increase from a year earlier to a decade high, 104 Job Bank (104人力銀行) said. The government is due to review the nation’s minimum wages. Employees at computer and consumer electronics manufacturers reported the highest average monthly wage of NT$60,000 a month, followed by semiconductor firms at NT$59,000, and vendors of shoe and textile products, along with software and Internet businesses at NT$55,000, 104 Job