Wed, Jun 25, 2008 - Page 12 News List

Government may relax PRC bank ban

AFP , TAIPEI

The government plans to lift a ban on Chinese banks investing in Taiwan as cross-strait ties improve, a financial regulator said yesterday.

However, the Financial Supervisory Commission said it was considering a cap on Chinese banks’ ownership in Taiwanese banks if the ban were removed.

“With tensions across the Taiwan Strait reduced, the relaxation is expected to increase and enhance economic exchanges between Taiwan and China,” commission Vice Chairwoman Susan Chang (張秀蓮) said.

“The move is also part of Taiwan’s efforts in financial liberalization,” Chang said, but added that the commission had not yet set a timetable for the relaxation.

In an initial phase, Chang said the investment cap may be fixed at 20 percent but any details still needed to be mapped out.

“The investment restrictions can ensure Taiwan’s side will keep control on bank management,” Chang said.

The commission also aims to allow local brokerages to invest in their counterparts in China through offshore subsidiaries. The relaxations are pending approval from the Cabinet.

The commission already gave the go-ahead in April for Fubon Financial Holding Co (富邦金控) to invest US$34 million in Xiamen City Commercial Bank (廈門市商銀), the first time a local bank has been allowed to invest in China. The investment proposal is under review by Chinese financial authorities.

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