The DPP administration may make little headway with its financial reforms as the opposition-dominated legislature yesterday failed to iron out disagreements with the Ministry of Finance on the size of the Financial Restructuring Fund (金融重建基金).
According to PFP legislator Norman Yin (
One pundit yesterday expressed regret that taxpayers may have to pick up the tab following the legislature's failure to pass the bank bailout fund yesterday.
"In lieu of the fund, losses created by distressed banks, such as Chung Shing Commercial Bank (
"This is very disappointing. There's an urgent need to enact the fund to bail out failed banks," Hsu added.
According to Gary Tseng (
The legislature, however, yesterday effectively passed the less-important agricultural financial law (
The law stipulates that grass-roots financial institutions will be allowed to buy back their cooperative assets that were previously taken over by the government despite the fact that the finance ministry spent an additional NT$90 billion on bailing them out.
Confiscated assets from 36 cooperatives are expected to cost grassroots financial institutions less than NT$1 billion to buy back, according to Chen Min-chi (陳明吉), secretary-general of the National Training Institute for Farmers' Organizations (中華民國農訓協會).
The finance ministry had previously argued that the government's previous action to take over cooperatives was "irreversible" and, therefore, repeatedly rejected the organization's petition.
The law, moreover, stipulates that government funding in the yet-to-be-established national agricultural bank -- which has start-up capital of NT$20 billion -- will be raised from 20 percent to between 35 percent and 45 percent.
Chou Tein-chen (
"There is little room for the agricultural banking sector to compete and survive," Chou said.
Chou questioned whether cash-strapped grassroots financial institutions may have problems raising enough capital to co-found the agro-bank.