Minister of Finance Lee Yung-san (李庸三) yesterday said the NT$140 billion (US$3.98 billion) financial reconstruction fund is "absolutely not enough" for helpign banks write off bad loans in this country.
Instead, Lee appealed to lawmakers for support of his ministry's proposal to increase amount of the fund, a mechanism similar to the one adopted by the Resolution Trust Corp in the US in early 1990s.
Lee made the remarks when he answered questions during a general interpellation session at the legislature.
Legislator Norman Yin (殷乃平) of the opposition People First Party noted during the interpellation session that the overdue loans of domestic financial institutions have hit NT$1.6 trillion (US$4.55 billion), which he termed a serious problem, although Premier Yu Shyi-kun in his oral report had omitted to mention financial problems.
Yin asked Lee how he plans to solve the problem of the huge sum of non-performing debts.
Lee said that the financial reconstruction fund has been in operation since last year and that financial institutions have written off NT$230 billion (US$6.55 billion) in bad debts to date.
He added that his ministry will continue to encourage the financial sector to write off as many bad debts as possible.
However, he noted that overdue loans increased last year despite the operation of the financial reconstruction fund.
Lee said that between NT$70 billion and NT$80 billion of the financial reconstruction fund had been used to help financial institutions write off their dud loans.