The government may establish an asset management company (AMC) under its Financial Restructuring Fund in an effort to better battle bad-loan problems at domestic financial institutions, Minister of Finance Lee Yung-san (李庸三) said on Saturday.
"Now that the property market seems to have hit rock-bottom, it would do no harm for the government to act as a big landlord, acquiring collateral from non-performing loans for re-sale during better economic times," Lee said.
An AMC doesn't necessarily have to be state-run, Lee said. By selling their non-performing loans to the government, local banks may quickly resume normal business operations, he said.
The ministry proposed the plan after facing three failed auctions to sell off Chung Shing Commercial Bank (中興銀行), which is estimated to have a deficit of nearly NT$88.5 billion. The government's restructuring fund is unable to absorb such losses.
Under the ministry's plan, the AMC would operate as a bridge bank, while also becoming involved in the management of troubled banks, Lee said, although he didn't provide details.
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