President Chen Shui-bian (
"I want the Executive Yuan to make the year 2001 the year of financial reform, which aims at reforming the domestic financial system," Chen said. "On top of the list is solving the problems at credit cooperatives."
Chen made the comments during a nine-member task force meeting held late Tuesday night at the Presidential Office.
Chen said he supports the seven recent directives on financial reform proposed by Premier Chang Chung-hsiung (
The seven directives are aiding troubled credit cooperatives; promoting mergers within the banking sector; quickly helping banks with a liquidity crunch by establishing a Resolution Trust Company; promoting the securitization of real estate mortgages; promoting the establishment of financial holding companies; promoting the establishment of asset management companies; and setting up a Financial Supervisory Board.
After Chang made the proposal, Chen made several comments on the financial reforms issue, according to an Executive Yuan official.
"We should complete the amendment of the Depository Insurance Law to aid problematic banks with huge bad loans," Chen reportedly said, according to the official.
"The administration is clear and determined to promote financial reform. The Executive Yuan would like to see these measures pushed through according to the original deadline of this year, which would ameliorate possible risks [to the financial system].
"Secondly, the Executive Yuan needs to gain the confidence of the international financial community in our financial system. This will include disclosing the current situation of the domestic financial system to the international media and avoiding erroneous reports like that in the Financial Times."
President Chen also mentioned that among the seven directives, five of them are related to the financial laws and regulations amendment. The Executive Yuan, he said, should not use the fact that the ruling party is a minority party in the Legislative Yuan as an excuse. "The Executive Yuan should act aggressively to build a consensus [on the amendment]," Chen said.
In related news, a KMT legislator said the KMT has completed three drafts related to financial reform. The KMT will reportedly seek to negotiate with other political parties and complete the amendment as soon as possible, in order to prevent a financial crisis.
"The KMT has completed a draft of the establishment and management of a financial reconstruction fund, an amendment of Article 17 of the Depository Insurance Law and an amendment of Article 11 of the Business Law," said KMT caucus whip Cheng Yung-chin (
"The KMT would like to negotiate with other members in the Legislative Yuan,and complete these amendments as soon as possible in order to prevent a possible financial crisis.
KMT legislator Lo Min-tsai (
"Although the finance ministry decided last year to waive the business tax for financial institutions [from 2 percent to zero], the KMT does not support the policy," Lo said.
"The KMT proposes that the tax waiver be limited to four years. The 2 percent business tax should then be resumed and the tax revenue should be used as the fund for a kind of Resolution Trust Company. Then the fund could be used to solve problems at the credit cooperatives.
This is the outline of the draft of KMT's financial reconstruction fund," he added.
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