The government yesterday for the first time began backing away from its pledges to implement the second stage of financial reforms, saying that the important issue was not whether the government met its goals, but the overall symbolism of the process.
The Ministry of Finance and the Financial Supervisory Commission (FSC) held a joint press conference yesterday evening, saying that the government was determined to keep implementing reforms. However, the regulators downplayed whether the goals laid out by President Chen Shui-bian's (陳水扁) economic advisory panel would be met according to schedule.
These goals include halving the number of state-run banks to six by the end of the year and slashing the number of financial holding companies from 14 to 7 by the end of next year, in a bid to boost the competitiveness of the over-crowded banking sector.
However, after the failure earlier this month of the effort to shed the government's stake in the Taiwan Business Bank (
"We don't have to worry that Taiwan's financial market will be dominated by these conglomerates, as the reforms are carried out through fair and transparent mechanisms," Minister of Finance Lin Chuan (林全) said.
"In addition, the number is not everything. We have to stress the necessity and legitimacy behind the reforms," he noted, adding that if competitiveness cannot be boosted through such efforts, the sector would still need to be improved.
However, as only three poorly performing state-run banks -- Bank of Overseas Chinese (華僑銀行), Taiwan Development & Trust Corp (台開信託) and Chang Hwa Commercial Bank (彰化銀行) -- have merged with private operators, critics have been grilling the ministry as to whether its check to push for reforms will bounce.
Lin merely said that the ministry will do its best, and that the economic advisory panel will review the content of the reforms.
Lin Chung-cheng (
Through the financial reform, the government hopes to foster large-scale banking institutions with balanced specialization in four major niche markets -- consumer banking, corporate banking, investment and asset management, he said.
Gary Tseng (
"Our near-term objective is to turn Taiwan into a regional financial services hub in 2008," Tseng said.