Sat, Oct 21, 2006 - Page 12 News List

Merrill Lynch calls for liberalization

By Amber Chung  /  STAFF REPORTER

As international banks rush to invest in local financial institutions this year, Merrill Lynch said yesterday that it was the cheap share prices -- not necessarily the quality -- of Taiwanese lenders that have lured foreign investors.

"Foreign investors are buying local banks for their cheap share prices and thus low investment cost [in light of the] consumer bad-debt problem," Merrill Lynch Taiwan Ltd's president Sophia Cheng (程淑芬) said in an economics seminar organized by Chung-Hua Institute of Economic Research (中經院).

They also liked financial institutions in other countries for their "high growth story," but those banks are expensive, she said.

Citibank is rumored to be in buyout talks with the Bank of Overseas Chinese (華僑銀行), while Standard Chartered Bank acquired Hsinchu International Bank (新竹國際商銀) for US$1.2 billion last month.

Taiwan needs to open up more to compete with its neighbors in attracting foreign investment, Cheng said, adding that further relaxation in taxation and human resources regulations are requiredsitefor Taiwan to realize its dream of becoming a regional financial hub.

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