Final draft for supervisory board passed

The Executive Yuan passed the final draft of the Financial Supervisory Board Organization Law (金融監督管理委員會組織法) yesterday. The draft gives the financial supervisory board the function of both policy-making and execution. The draft will be sent to the Legislative Yuan for review in the near term.

Executive Yuan officials said the draft gives the new supervisory board the authority -- which is currently being employed by the Ministry of Finance, Central Bank of China (央行) and Central Depository Insurance Co (中央存保) -- over the financial services industry including banking, insurance, securities and futures.

According to the draft, the financial supervisory board will enjoy the power to independently investigate cases and flexibility in its recruitment of personnel. In addition, it will be financially self-supportive through a fund to be set up in the future.

However, Finance Minister Yen Ching-chang (顏慶章) said yesterday at the Legislative Yuan that he is still concerned about what the new regulatory agency's position will be in government.

According to the draft, the board will operate directly under the Executive Yuan and the chairman of the board will be appointed by the premier.

Yen made the remarks yesterday while fielding questions by lawmakers about his opinion on the draft. He said the version passed by the Executive Yuan varies dramatically from those of most other countries.

"The structure is based on a board of commissioners. The most important policy decisions, however, will be determined by the chairman of the board," Yen said. According to the draft, there are to be nine members on the financial supervisory board, including one chairman, two deputy chairmen, four full-time commissioners, and two part-time commissioners, who are scheduled to be the current deputy finance minister and deputy governor of the central bank.

"Although there will be a deputy finance minister and a deputy Central Bank governor participating in the supervisory board's committee, the board chairman will be the one who ultimately decides policy," Yen said, hinting at his concern whether the finance ministry should have a say in deciding financial policy in the future.

"There are nine other countries in the world that have established this kind of supervisory board ... [But] Taiwan's design differs from most of the nine other countries ... There is only one country that has adopted the system that Taiwan has, with the head of the board functioning independently from the finance minister," he added.

The minister further pointed out that when there is a disagreement on financial policy and taxation [fiscal] policy in the future, a conflict between the finance minister and the supervisory board chairman is likely to occur. "By then, we would need higher ranking officials to help work out the differences," Yen added.

When asked by lawmakers whether such a design would compromise the government's administrative efficiency, Yen replied that because he is part of the Cabinet he has no comment on this issue.