Thu, May 24, 2007 - Page 12 News List

Report on converting state banks due in three months

By Jackie Lin  /  STAFF REPORTER

The Ministry of Finance yesterday said that it would submit a preliminary report in three months on the ability of state-run banks to form national financial holding companies.

Minister of Finance Ho Chih-chin (何志欽) referred to the report while answering questions during a meeting of the legislature's Finance Committee yesterday.

The Bank of Taiwan (台灣銀行), the nation's largest lender, will merge with the Central Trust of China (中央信託局) on July 1, but whether it should be allowed to transform into a financial holding firm requires careful consideration, Ho said.

The Conference on Sustaining Taiwan's Economic Development held in July last year also concluded there was no need to form national holding firms, he added.

Meanwhile, Chinese Nationalist Party (KMT) Legislator Lee Chi-chu (李紀珠) said the government's second stage of financial reforms were contradictory.

Two of the reform's four major goals are to cut the number of the nation's financial holding firms from 14 to seven and to reduce the number of state banks from 12 to six.

When asked by Lee about the performance of state-controlled holding firms, Deputy Minister of Finance Liu Teng-cheng (劉燈城) said Mega Financial Holding Co (兆豐金控), Hua Nan Financial Holdings Co (華南金控) and First Financial Holding Co (第一金控) rank among the top seven.

Interpreting Liu's comments as indicating that the government intends to keep the three holding companies intact, Lee said that this conflicted with the government's goal of financial reform.

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