Print

Mail

wiki links

Banking reform should be clearer, entrepreneur says

The government should lay out clearer policies and directions for the second-stage of its financial reform plan in order to successfully liberalize the banking sector, an entrepreneur said yesterday.

"The reform is moving in the right direction, but the issue isn't about downsizing the number of financial institutions, it's about how well the government liberalizes the industry and enables it to connect with international trends," said Ho Shou-chuan (何壽川), chairman of the International Bank of Taipei (台北商銀).

The government should not put too many restrictions on the already highly regulated banking sector, but allow lenders to move outside Taiwan and expand across the Taiwan Strait, Ho said.

Ho made the remarks yesterday at a forum organized by the Chinese-language magazine Global Views Monthly.

Unclear strategies

"The government intends to allow local banks to invest in China, but the strategies and policies are yet to be clearly laid out," he said, adding it should not be too worried as the capital invested overseas will eventually flow back to Taiwan.

In October last year, President Chen Shui-bian (陳水扁) announced plans to consolidate the banking sector, including halving the number of state-run banks to six by the end of this year and cutting the number of financial holding firms to seven by next year.

According to Ho, Taiwan is now moving into the service industry ? especially the financial sector ? for economic growth. Traditional industries such as manufacturing are losing their shine because most firms are choosing to move their production offshore for lower costs, he said.

Services important

The service industry's importance is rising. It now contributes around 70 percent of the nation's GDP growth, while conventional sectors account for only 30 percent.

The financial sector's contribution to GDP will rise slightly to 13 percent next year from 12 percent this year, he added.

To increase the competitiveness of the banking sector, technology should be used to link the banking platform with various segments of the supply chain, including manufacturing, retailing, distribution and consumers, Ho said.

Offering consumers Internet or mobile banking transactions based on a wireless broadband infrastructure and smartphones would be a good start, he added.

In a move to facilitate the upgrade from traditional industries to the service sector, enterprises should embrace revolutionary products and processes, said Ho, who is also chairman of Yuen Foong Yu Paper Manufacturing Co (永豐餘造紙).

Citing the paper maker as an example, he said it has introduced biotechnology into the pulping and paper-making processes, such as using enzymes for bleaching and deinking, which will improve profit margins and give the company a market niche.
This story has been viewed 1605 times.