Financial Supervisory Commission (FSC) Chairman Sean Chen (陳冲) rolled out his priority policies during yesterday’s legislative session, which included a recommendation to deposit postal savings, totaling NT$4 trillion (US$119.2 billion), in domestic “small and medium-sized private banks.”
The commission will coordinate with the Ministry of Transportation and Communications (MOTC) to study the feasibility of transferring postal savings into deposit accounts of small and medium-sized private banks, which would then be encouraged to grant more loans to local businesses, Chen said in his report to the legislature.
“These postal savings shouldn’t have sat idle and [Chunghwa Post] should have taken advantage of the government’s blanket deposit guarantee to make good use of its savings by allowing private banks to facilitate loans,” Chen said at the legislature’s Finance Committee during a question-and-answer session.
But he didn’t give details, saying that the commission would need time to coordinate with the MOTC before coming up with a detailed plan including which private banks would receive such deposits.
Chinese Nationalist Party (KMT) Legislator Lu Shiow-yen (盧秀燕), however, said Chen’s new policy may amount to nothing, as many expect domestic banks that are not competitive would exit the local market soon amid the recent financial meltdown.
She also warned that Chen may trigger a controversy over which banks the commission would choose to receive capital.
In response, Chen said that his commission would not interfere but asked Chunghwa Post to stick to its existing internal rating measures in determining which banks are suitable for depositing its savings.
Moreover, Chen also clarified media reports about the delayed implementation of new accounting standards for company inventories, in accordance with International Accounting Standard Statement No. 10.
He said that the FSC was conducting surveys and would soon finalize a decision on whether it would delay the Jan. 1 implementation date by another year.
Chen reiterated the commission’s policy to come to the rescue of financially stressed businesses by offering loan roll-overs.
The FSC will soon hammer out measures to attract overseas capital by allowing qualified domestic institutional investors (QDII) in China to invest here, he said.
When asked to comment on the recent stock slump, Chen shared his economic perspectives by citing a Standard & Poor’s analyst and said that it may take 25 months for world equities markets to bottom out.
He assured investors that the commission would end its ban on the short-selling of 150 domestic stocks, including stocks in the Taiwan 50 Index and Taiwan mid-cap 100 Index, on Jan. 5 as previously scheduled.
The commission, however, needed more time to assess whether it would lift the short-sale ban on all other stocks, Chen said.
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