Taipei Times: Foreign investors have been actively investing in local financial institutions this year. What policies and measures has the Financial Supervisory Commission taken to deal with this matter?
Shih Jun-ji
We welcome any interested foreign buyers, whether they are international banks that can bring in know-how and expertise or private equity funds whose capital injection can help improve the financial structure of local banks.
We have met and talked with some of the heads of interested foreign banks. We are very willing to offer assistance like we did in facilitating Standard Chartered Bank's buyout of Hsinchu International Bank (
We would continue to play the role of a facilitator when foreign investors want to invest in or acquire Taiwanese lenders in line with the market's mechanisms. Based on the principle of national treatment, international investors are subject to the same financial supervision as their local rivals.
TT: What is your optimal ratio in terms of foreign investment in the local financial market?
Shih: We don't have an exact figure for the optimal foreign investment ratio. Foreign investment in the domestic financial market currently amounts to around NT$90 billion (US$2.7 billion), accounting for more than 5 percent of local banks' assets which total NT$1.7 trillion. The [foreign investment] ratio is not that high.
But if the ratio shoots up to, say 95 percent, that will be too high. We also have to value what kind of impact -- positive or negative -- the increase of foreign investment will have on employment and profitability.
TT: You said you support consolidation of the financial sector but oppose monopoly and oligopoly, can you elaborate?
Shih: If fragmentation and monopoly/oligopoly are on the opposite sides of the spectrum, I prefer somewhere inbetween. For example, if the combined market share of the top four players reaches 95 percent, that is too high and dense. On the other hand, if the combined share is a low 40 percent, that is indicative of a heavily fragmented market.
The combined market share of Taiwan's top five lenders, including Bank of Taiwan (
I hope to see more banks enjoy an individual market share exceeding 10 percent and that at least one Taiwanese bank can squeeze into the world's top 100. But this must be achieved in line with market mechanisms.
Second-stage financial reform which originally aimed at achieving a limited number of banks within a specific timeframe has led to a number of problems and demonstrates such measures impracticable.
TT: Any plans to introduce foreign investment into less-efficient state banks while relieving their concern over policy uncertainty?
Shih: The Ministry of Finance has hammered out a scheme to introduce qualified foreign investors with decent credit ratings in future disposal of state holdings. Merging state banks and revamping [their operations] by hiring professional managers is another solution. The merger between Bank of Taiwan and the Central Trust of China is a case worth observing. However, during the course of the disposal of state holdings, the government needs to keep its word so that state holdings can run smoothly without disputes.
TT: What is the commission's stance on cross-strait relaxation for the financial industry?
Shih: We don't want to talk about cross-strait liberalization in the wake of ongoing controversies. Cross-strait relations involve national policies which, as I said before, does not fall within the commission's jurisdiction. The commission is of one mind with the industry. We believe that banks should follow where their customers go.
TT: It's been three months since you've taken over this position. What can you say about the job and what are your expectations?
Shih: This is a very challenging job which involves a lot of pressure -- not political, but [the pressure] stems from the work itself. After all, it means taking responsibility for the nation's financial industry, which involves NT$6 trillion in assets and accounts for 13 percent of GDP.
We would work hard to strengthen supervision [by implementing both] precautionary and punitive measures. I hope I can make a contribution to the sound development of the nation's financial sector and help build up a healthy industry for the next generation.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by