For example, small and medium enterprises (SMEs), which make up over 90 percent of Taiwan's companies, would find it more difficult to borrow money if banks which are currently state-owned were to be controlled by family-run banks, Han said.
He noted that nine of the top 10 SME loaning banks are state lenders, while SME loans comprised less than 6 percent of the total lending of the six financial groups controlled by banks run by families.
The union federation successfully linked the interests of the employees to those of the public to voice people's growing concern and support the frustration about the government's flawed consolidation plan, he said.
The association will continue to lobby against consolidation activities that could adversely effect employees' rights and interests, Han said.
Nevertheless, an analyst questioned unions' strategies.
"Privatization of state firms to enhance competitiveness is a global trend, with private companies generally proving more flexible and profitable," said Susan Chu (朱素徵), a banking analyst at Taiwan Ratings Corp (中華信評), a local arm of Standard & Poor's Ratings Services.
Rising union power could be offset by internal conflicts, Han said, citing disputes between the unions of Chiao Tung Bank (交通銀行) and the International Commercial Bank of China (ICBC, 中國商銀), which are both Mega Financial's subsidiaries, over methods of countering rival Chinatrust Financial.
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