Taiwan’s legislative body is proposing to double the size of the National Security Fund (NSF) from NT$500 billion (US$1.6 billion) to NT$1 trillion.
The fund was created in 2000 with the aim of injecting capital into local financial markets during periods of volatility by purchasing stocks.
The Legislative Yuan’s financial committee proposed increasing the size of the NSF at a meeting livestreamed on December 9, saying that “the move would serve as a positive signal to the market and help boost investor confidence”.
According to the committee, “expanding the fund is necessary for it to effectively fulfill its purpose, especially given that Taiwan’s stock market capitalisation has surged over tenfold since the fund’s inception, with increasing participation from foreign investors”.
It also suggested that local financial institutions contribute more to financing the NSF.
The institutions currently contribute NT$200 billion and the committee wants this to be increased to NT$700 billion, while keeping unchanged the NT$300 billion contribution from major government insurance and pension funds such as the Labour Pension Fund and the Public Service Pension Fund.
“Drawing additional funds from government sources is not advisable, as these are primarily allocated for retirement savings for public servants and military personnel,” the committee says. “Utilising more from these sources could undermine their goal of achieving long-term stable investment performance.”
