According to a report by Taiwan's Economic Daily News on October 27, Taiwanese banks are intensifying their competition for deposits due to strong corporate financing demand, stock market liquidity constraints, and pressure from liquidity coverage ratio (LCR) management. Financial sources revealed that the interest rate banks are negotiating for NT$10 billion in deposits from TSMC has risen from 1.75% four months ago to 2.1%, an increase of 35 basis points. Deposit rates for other technology companies have also been pushed up to over 2%. Data shows that as of the end of August, the average LCR of 37 Taiwanese banks was 120.57%, a decrease of 8.22 percentage points compared to the same period last year, but an increase of 5.05 percentage points compared to the end of July. Meanwhile, a NT$600 billion project loan from Taiwan Power Company and CPC Corporation is consuming Postal Savings Bank's deposit quota, weakening its ability to continue providing funds to banks. Rising bank funding costs and LCR management pressure may also lead to longer waiting times for some mortgage applications. However, on October 27, a Taiwanese state-owned bank responded that although market funds were tight, overall liquidity and payment capacity were normal, and there was no systemic liquidity risk.
