Financial Supervisory Commission (FSC) chairman-designate Gordon Chen (陳樹) pledged on Monday to boost the value of Taiwan’s financial services output during his four-year term beginning on July 1.
Chen also promised to safeguard the FSC’s status as an independent financial watchdog.
The financial services sector contributed NT$1.26 trillion, or 10.04 percent, to the GDP last year, but Chen said the sector still has considerable room for expansion because it is not subject to restrictions in terms of space and time.
Chen unveiled his plan to promote a capital market integration law within one year to combine the trading platforms of financial products, help the financial industry cut costs and removing boundaries between financial products.
Chen argued that the measure, which he said would internationalize financial institutions and achieve larger economies of scale, is crucial to Taiwan’s bid to become a hub for asset management and resource mobilization in the Asia-Pacific region.
Noting that major regional economies — including Hong Kong, Singapore and South Korea — have begun to integrate their capital markets, Chen said Taiwan must speed up its efforts to avoid being left behind.
On financial reform, Chen said the new government would continue the work carried out by the Democratic Progressive Party (DPP) administration, but would not set a timetable for reform or any targets in terms of how many financial institutions should be phased out of the market.
He was referring to second-phase financial reforms that have been implemented by the DPP administration since 2004, which aim, within specific periods of time, to halve the number of publicly owned banks to six; help at least three financial institutions grab a market share of at least 10 percent; halve the number of financial holding companies; and help at least one financial institution to list shares on overseas stock markets or be operated by a foreign owner.
According to Chen, the incoming Chinese Nationalist Party (KMT) government would continue to encourage mergers of domestic banks and the participation of foreign investors in Taiwan’s financial sector.
Chen said that although the new government would also set certain reform objectives, it would respect the market mechanism and follow the principles of impartiality, transparency and fairness while trying to achieve the objectives.
On measures to stabilize financial markets, Chen proposed setting up a crisis management mechanism that encourages self-discipline among financial institutions.
As for cross-strait financial activities, Chen said that in order to invigorate Taiwan’s financial markets, the government would adopt a more liberal approach in cross-strait financial policies.
He said, however, that the government must also protect the country’s dignity in the process of lifting its restrictions on cross-strait financial activities and would step in to control such activities if necessary.
Chen added that he would work to establish a cross-strait financial supervisory and regulatory mechanism after assuming his post.