Minister of Finance Yen Ching-chang (
"It's not reasonable to say that the financial holding companies will saturate the [financial] market," Yen said.
Yen made the comments in response to reports in Chinese-language media quoting a Lehman Brothers official as saying Taiwan's financial market is only big enough for five financial holding companies.
The ministry on Wednesday approved six financial holding companies after a total of 11 financial groups applied for a license. Others are likely to be approved in the near term. According to market watchers, there are a total of 15 financial groups interested in setting up financial holding companies.
The plan is positive for the sector as a whole, Yen said.
"Most of the institutions within financial holding companies will be able to expand their business after setting up operations. It's likely that the financial market will undergo another wave of mergers following the restructuring."
International competitive pressures are also growing as institutions begin to prepare for Taiwan's entry into the WTO -- expected officially on Jan. 1.
But the biggest pressure has been from the government, which earlier this year passed laws -- including the Financial Holding Company Law -- designed to breakdown barriers between financial services and speed consolidation.
Analysts said the long-expected changes to the overcrowded sector would strengthen competitiveness over the long term, but that it will take at least one to two years before a leaner industry emerges.
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