The Chinese Nationalist Party's (KMT) legislative caucus challenged the Presidential Economic Advisory Group yesterday to debate the government's second phase of financial reforms, one day after President Chen Shui-bian (陳水扁) claimed that the direction of the reforms "is entirely correct."
In his Double Ten National Day address, Chen said the first phase of reform has been completed and that the second phase has started.
Although the second phase has encountered "certain challenges" and there is still room for improvement in executing the policy, it's direction "is entirely correct," he said.
The KMT caucus said the second phase of reform, if implemented as planned, will lead to the financial industry being dominated by conglomerates.
KMT Legislator Fei Hung-tai (費鴻泰) questioned Chen's wisdom in pushing ahead with a program whose direction he said the Finance Ministry and the Financial Supervisory Commission are not clear about.
Fei challenged the Economic Advisory Group to an open debate about the program.
KMT Legislator Lee Chi-chu (李紀珠) said that if the reform plans go wrong, it could trigger a financial crisis.
If the officials who drafted the plan are afraid to debate its merits with experts and academics, that means "something is not quite right" about the reform program, she said.
Chen said the second phase of reform will center on the merger and integration of public and private financial institutions, which he hopes will "accelerate the inflow of foreign capital investment and attract foreign managerial teams to enhance the competitiveness of Taiwan's financial industry in the global community."
The first phase was aimed at reducing the average non-performing loan (NPL) ratio of banks to less than 5 percent and to raise the average capital adequacy ratio (CAR) to 8 percent within two years.