The success of Taiwan’s high-intensity pandemic prevention significantly reduced covid cases in Taiwan. As a side effect, however, the population lacked antibodies. Thus, after the mask ban was lifted this year, there was an unprecedented spring and summer flu wave. This type of epidemiological surge is called “immunity debt.”

A similar situation has occurred in the economy, as our high performance during the pandemic spared us from the social challenges and economic losses that other countries suffered. Due to this performance, however, we let our guard down. Since this year, when the Chinese economy failed to rebound as expected, our exports also declined. Optimistic forecasts made by various organizations at the beginning of the year have been abandoned.

The international community has begun to discuss how to strengthen financial resilience in light of the increased frequency of natural and man-made disasters. The antonym of fragility is not strength, but “antifragility,” which means targeting one’s own weaknesses to build stronger protective capacity in the face of shocks.

As Andriy Pyshnyi, president of the Central Bank of Ukraine, said when receiving the Central Banking Award 2023: “If we can't predict what the black swans of the future will look like, then we will all have to make ourselves antifragile.” This is similar to Taiwan’s pandemic policy. Once it decided to stop targeting “covid zero,” it had to confirm whether the population had sufficient antibodies to enter a new phase of “coexistence” with the virus.

What does financial resilience mean? It means the ability to properly assess risks and manage them against a variety of vulnerabilities. Taking financial consumers as a more specific example, the International Organization of Securities Commissions (IOSCO) has recommended strengthening investor resilience over the past two years. After all, besides just natural and man-made disasters, financial innovation also affects the financial system, bringing new business opportunities to the financial industry and potential benefits to investors, but also associated challenges and risks.

Therefore, in order to enhance resilience, IOSCO has proposed improving investor education and investor protection. It has made investor resilience the theme of the past two consecutive World Investor Week (WIW) events, calling for global attention. Domestic and foreign experts were invited to the Taiwan 2023 WIW, jointly organized by the Taiwan Stock Exchange, Taipei Exchange, Taiwan Futures Exchange, Taiwan Depository & Clearing Corp., and several other related organizations, to jointly discuss resilience.

Following the 2008 financial crisis, major adjustments were made in the direction of financial supervision, significantly increasing capital adequacy ratios. Now, as the US Fed maintains its higher rates, it is clear the financial market has bid farewell to the stability of the past and is gradually entering unknown territory. Taiwan has a large stock of financial assets. In the face of foreseeable but uncertain future challenges, regulators, financial institutions, and consumers must all work together to systematically improve the resilience of the financial system. I hope that in the post-pandemic era, Taiwan will be able to tighten its seat belt, become stronger and less fragile, and bravely face its challenges to create another economic miracle.