The Financial Institutions Commission (FIC) assures the public that all the banks operating in Palau are financially stable and have “high liquidity”, or enough money to pay their depositors’ withdrawals.
“As of this time, the FIC wishes to reassure the public that there is no bank operating in Palau that is at risk of losing their depositors’ money. The local banks are safe, secure and continue to operate in a sound manner,” an FIC press release said.
The statement was issued following reports that the national government has moved $30 million of its deposits out from Bank of Guam, and concerns were raised about the impact of the act on Palau’s financial sector.
In the press release, FIC asserts that “US Branch banks remain in good condition, have adequate liquidity and solvency, and are in good standing with the Palau FIC and the US FDIC and their other US regulators.”
Regarding recent encounters people have had with limits to cash withdrawals, FIC stated that this is due to other factors such as lack of tourism activity, the limited number of flights from Guam transporting cash, large WIOA direct payments and people hoarding cash, which all contribute to a “higher than normal demand for cash”.
FIC announces that it has been in frequent communications with local banks and headquarters of foreign banks since the pandemic began to address matters that required FIC attention.
“The FIC has no concerns about the stability and viability of the banking sector,” the statement said.
The Financial Institutions Commission was established as a regulatory agency tasked with maintaining “financial regulatory and supervisory system for the Republic of Palau, consistent with international standards, which promote a stable banking and financial sector”, according to its mission statement.