Pundits have high hopes for Lin Chuan

Newly appointed Minister of Finance Lin Chuan (林全) will have to move full speed ahead to address finance and tax-reform issues, economists said yesterday.

"The moment he takes office Lin should immediately vow to follow through with financial reforms -- a matter of national competitiveness," said William Lin (林蒼祥), a professor of finance at Tamkang University.

The professor said that Lin Chuan should begin by conducting talks with the Council of Agriculture and resolve issues concerning management of community-level credit units while securing small loans for needy farmers.

Cracking down on those in the sector that have abused their authority should be a priority.

"The new minister should deal with sweetheart loans granted to cronies of bank officials, which account for nearly 88 percent of the sector's bad loans," William Lin said.

Sharing a similar view, Chen Po-chih (陳博志), former head of the Council for Economic Planning and Development, said that Lin Chuan should accelerate investigation into financial crimes, taking swift action against suspects who borrow money from banks and deliberately default on loans.

Bank chiefs from institutions with high non-performing loans -- if found guilty of moral hazard -- should be put behind bars as soon as possible, he said.

William Lin said that the new minister should push for legislative passage of a proposed NT$1.05 trillion Financial Restructuring Fund (金融重建基金) to clean up the nation's bad loans, estimated at NT$1.43 trillion as of September.

The fund will be used to bail out troubled banks including debt-ridden Chung Shing Commercial Bank (中興銀行) to cut losses draining the nation's coffers.

The establishment of a Financial Supervisory Board is another urgent issue to address so that an independent and unified regulatory body will be created to oversee performance of commercial banks, financial holding companies, securities houses and insurers, he said.

David Hong (洪德生), vice president of Taiwan Institute of Economic Research, urged yesterday that the new finance chief to resist plans to authorize the council to take over management of agricultural credit units. Instead, he suggested that the council and the Ministry of Finance jointly supervise the nation's agricultural development and finance.

Hong said also that Lin Chuan should propose measures to re-construct the nation's tax structure, expand the tax base to increase government revenue while addressing entrepreneurs' demands for further tax cuts.

In an effort to increase government spending on infrastructure projects, both Hong and Chen also said that the Public Debt Law (公債法) should be revised, allowing the government debt ceiling to be raised from 15 percent to 20 percent.

"Lin should help the government allocate funding for public works, stimulating local investments to boost the economy," Chen said.

Lin Chuan should also implement improved management of state-owned property and accelerate the privatization of state-run enterprises, maximizing use of public assets to generate income and reduce expenditures, Hong said.

Hong expressed his confidence in Lin Chuan's ability, saying "the public should expect to see him running on the right track very soon."