The legislature yesterday declined to act on a Ministry of Finance proposal to extend for another year the Financial Restructuring Fund (
The fund -- modeled after the US' Resolution Trust Corp -- was created in July 2001, and NT$140 billion (US$4.25 billion) was allocated for the following three years to work through the financial sector's core bad-debt problems.
Since late last year, the ministry has taken every opportunity to lobby lawmakers to increase the fund's available capital to NT$680 billion from some NT$40 billion remaining after clearing debts for 44 financial institutions.
But opposition lawmakers appeared to be in less of a hurry than government officials were.
"Further negotiation is needed, along with revisions to the Resolution Trust Committee Fund Regulatory Provisions (金融重建基金設置及管理條例)," said People First Party (PFP) Legislator Chen Chih-bin (陳志彬), who chaired yesterday's finance committee meeting.
Speaking at the meeting, Vice Finance Minister Susan Chang (張秀蓮) urged the legislature to accelerate the passage of the Resolution Trust Committee Fund Regulatory Provisions.
She also urged the legislature to accelerate the proposal for the extension.
Chang said that because the ministry spent nearly NT$100 billion to bail out the 44 community-level financial institutions, the fund needs to be increased right away.
This would enable the government to aid additional debt-ridden banks, including Chung Shing Bank (中興銀行) and Kaohsiung Business Bank (高雄企銀).
Since the Resolution Trust Committee Fund Regulatory Provisions will take time to nego-tiate, the ministry asked legislators to extend the fund for an-other year. "The ministry is confident that most problematic banks will have their problems resolved within the next year if the fund is replenished" to NT$680 billion, Chang said.
Opposition legislators who opposed the ministry's proposal included the PFP's Norman Yin (殷乃平) and Thomas Lee (李桐豪) and the Chinese Nationalist Party's (KMT) Lo Ming-tsai (羅明才).
The legislature is scheduled to hold another round of interparty legislative negotiations Thursday.
In the negotiations legislators will discuss the Resolution Trust Committee Fund Regulatory Provisions as well as the extension proposal.
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