Financial activity unaffected by severance of Taiwan-Panama relations

Formal diplomatic relations not a prerequisite for cooperation between financial institutions, says official

Financial activity unaffected by severance of Taiwan-Panama relations

Insurance News

By Gabriel Olano

The activities between Taiwanese and Panamanian financial institutions will not be affected by the severance of diplomatic ties between the two governments, according to Taiwan’s Financial Supervisory Commission (FSC).

“The primary task of financial institutions is to meet the needs of industry, and it does not matter whether or not they are located in a country that has diplomatic relations with Taiwan,” Chen Yen-yi, an official attached to the FSC’s banking bureau, told Focus Taiwan.

Chen pointed out that many Taiwanese banks’ overseas offices are located in countries that do not have official diplomatic relations with Taiwan. The FSC and its Panamanian counterpart have also signed a memorandum of understanding that outlines both governments’ cooperation in financial supervision.

FSC statistics show that the total risk exposure of Taiwan’s insurance, banking, and securities sectors in Panama is just below NTD100 billion (US$3.3 billion).

Panama, a former long-time Central American ally of Taiwan, announced on Tuesday that it will shift its diplomatic recognition from Taipei to Beijing, in line with the mainland’s One China Policy. This signalled the end of over a century of formal diplomatic relations between Panama and the Republic of China (Taiwan).

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