Critics losing confidence in FSC

Following a week of flip-flops over automatic teller machine (ATM) transfers and cash-card advertisement bans, critics have started to worry about whether the Financial Supervisory Commission (FSC) is losing its authority to independently make and stick by policy.

The Ministry of the Interior meddled in the commission's duties last week by unilaterally announcing that a limit would be imposed on the amount of money transferred via ATMs. This move led to a flood of public complaints and sharp criticism over the commission's failure to exercise its authority.

Earlier this month the FSC announced plans to ban lenders from airing television, movie and radio advertisements for cash cards starting May 1, in a bid to discourage consumers from taking out high loans. But in an about-face last week after mounting pressure, the commission said it may backtrack on the plan.

"The commission is not clear about its role at all," Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) said yesterday. "It should firm up its stance and safeguard its independence against external pressure in making policy."

Lai added that the commission has often failed to make a detailed and comprehensive evaluation of its proposed policies. It has often leaked information before finalizing policies, which damages the commission's professional image and credibility, Lai said.

The Cabinet-level commission has often failed to address issues they are supposed to manage -- such as the ATM transfers -- while paying too much attention to less important things like the bans on cash-card ads, said Lai, who is also professor at the Graduate School for Business Administration at National Chengchi University.

The commission was established on July 1 last year after the legislature passed the Financial Supervisory Commission Organizational Law (金融監理委員會組織法) in July 2003.

The commission merges government agencies which were previously under the Central Bank of China, the Central Deposit Insurance Corp and the Ministry of Finance into one umbrella agency, in a bid to centralize regulation of the nation's banking sector.

But since July last year, the commission has several times flip-flopped on its policies. It has indicated a possible delay on increasing the stock market's daily trading limit after Premier Frank Hsieh (謝長廷) asking for more support measures earlier this month. And it conceded on the issue of independent board directors and superintendents following strong opposition from business communities last year.

"The organization law bestowed an independent status on the commission ... and the commission should not surrender to pressure coming from its superiors, peer departments and others," People First Party Legislator Christina Liu (劉憶如) said last week.

Liu said she couldn't believe the commission failed to stick to its stance on the ATM issue and make professional evaluations, such as how much society would have to pay for the ATM restrictions.

Both Liu, who used to be head of the Graduate Institute of Finance at National Taiwan University, and Hsieh Wen-cheng (謝文政), another KMT legislator, said the ATM transfer dispute exemplified the problem of the commission's role. During a question and answer session with Premier Frank Hsieh (謝長廷), they asked Hsieh to reconsider whether the commission should be included in the Cabinet or be an independent agency.