Wed, Dec 15, 2004 - Page 10 News List

Lawmakers at odds over finance bill

BAIL-OUT FUNDING Legislators see little chance of a restructuring bill amendment being passed in the final days of this legislative session

By Joyce Huang  /  STAFF REPORTER

The fate of an amendment to a bill to fund a clean-up of the financial sector is still up in the air after the caretaker Cabinet and the legislature failed to reach an agreement late Monday.

"We are pretty pessimistic that the Financial Restructuring Fund (金融重建基金) bill and other major financial bills will be deliberated on by the year's end," Cabinet Spokesman Chen Chi-mai (陳其邁) said yesterday.

According to Chen, Premier Yu Shyi-kun met with Legislative Speaker Wang Jin-pyng (王金平) Monday afternoon in an attempt to solicit his support to accelerate the passage of 33 bills, including the one related to the fund, which are on the Cabinet's priority list for passage before a reshuffle in February.

But Wang only promised to push forward passage of bills that are urgent -- such as the central government's budget -- by the year's end.

The Financial Restructuring Fund is modelled after the US Resolution Trust Corp of the 1980s and was set up in 2001. The fund has dwindled to around NT$40 billion (US$1.23 billion) from an initial NT$140 billion. The amendment lawmakers are considering would expand the size of the depleted fund.

The legislature is reviewing the supplemental funding this week, but people close to the inter-party negotiations see slim chances of it being passed during the lame-duck legislative session that ends on Dec. 31.

DPP Legislator-at-large Lin Chung-cheng (林忠正) yesterday reiterated that there's little chance of the bill being added to the legislative agenda in the next two weeks, making the odds of it being passed in an extraordinary session early next year even slimmer.

Lin had previously predicted that the bill, which has been frozen in the legislature for over a year, might re-emerge after the newly elected legislature convenes in two months.

Still, People First Party legislator Norman Yin (殷乃平) yesterday was relatively optimistic, saying that the opposition alliance has already given its initial consent to expand the fund's size to a proposed NT$320 billion.

"It all depends on the legislature's pace, since most disagreements have been ironed out," Yin said. He denied media reports that the party wants to cut the government's proposed funding to NT$240 billion.

Even so, the government's failure to quickly re-open a legislative discussion on the fund's size has impacted financial shares.

On Monday, the market fell slightly following the DPP's electoral defeat, further pushing the stock market's financial index down by 19.2 points from Friday's 1020.69 points, to close at 1001.45 points.

The financial index edged up to 1004.13 points yesterday after a local media report said the legislature had agreed to pass the fund's bill by the year's end, pending a finalization of the fund's size.

The report, however, turned out to be inaccurate, according to the Cabinet's spokesman.

Alex Huang (黃國偉), assistant vice president of Barits International (倍利國際), yesterday downplayed the significance of the bill's passage, saying "the bill has limited impact on financial shares."

"Financial shares may go through up-and-downs along with the bill's progress, but in the long term, upside is foreseeable, which is irrelevant to the bill's passage," Huang said.

Huang said the government is unlikely to backtrack on financial reform and the banking sector is recovering as a result of rising interest-rate spreads, triggered by an interest-rate increase.

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