Finance minister says restructuring fund needs boost

Minister of Finance Lin Chuan (林全) called on party caucuses at the Legislative Yuan yesterday, seeking support from legislators for the ministry's plan to boost the amount of the Financial Restructuring Fund (金融重建基金) to NT$1.05 trillion.

In order to boost the amount of the fund, the Cabinet has submitted a draft bill of a revision of the Fund Establishment and Management Regulations to the Legislature for approval.

The financial restructuring fund was established in June 2001 with the approval of the legislature. The Cabinet originally planned to raise NT$140 billion by levying a 2 percent tax on business revenues of monetary institutions from this year through 2005.

Lin told the legislators that with a little over NT$40 billion left after delivering a series of rescue packages to ailing monetary institutions, the RTC fund is insufficient to implement its tasks.

The Ministry of Finance proposes to boost the amount of the fund through issuance of public bonds, in addition to extending the time span for monetary institutions to pay business taxes from the originally designated four years to an unspecified period.

The ministry proposed amount of NT$1.05 trillion was found unacceptable by PFP Legislator Thomas Lee (李桐豪). He said that according to his estimate, the restructuring fund needs only to spend NT$330 billion to handle bankruptcy problems of some monetary institutions, if these banking institutions can raise funds themselves to handle their non-performing loans and problems related to capital insufficiency.

He suggested that with NT$520 billion, the fund is sufficient to handle the problems of the monetary system.

In the meantime, the National Policy Foundation, a Kuomintang think tank, held a seminar at the Legislative Yuan yesterday to discuss the restructuring fund management and supervision.

Chi Schive (薛琦), president of the training and research institute -- Taiwan Academy of Banking and Finance -- said that it is necessary to boost the amount to NT$1.05 trillion to tackle the deteriorating problems as soon as possible.