Tomorrow’s Cabinet reshuffle will not affect the timing of the signing of a memorandum of understanding (MOU) with China on cooperation in financial supervision, a senior official said yesterday.
“Negotiations on the signing of a financial MOU across the Taiwan Strait have been proceeding as scheduled and are expected to bear fruit by the end of this year,” Financial Supervisory Commission Vice Chairman Lee Jih-chu (李紀珠) said.
Speaking on the sidelines of a seminar on bills finance markets in Taiwan and China, Lee said the Cabinet reshuffle would not hold back progress on the pact.
“Talks have proceeded smoothly toward the goal and have not lagged behind the set schedule,” she said.
The signing of a financial MOU would enable Taiwan and China to cooperate in supervising financial institutions, set up a cross-strait currency clearance and settlement mechanism, permit commercial banks to exchange currency and work together on developing technologies to spot counterfeit notes, and allow financial institutions to establish branches in each other’s market.
Meanwhile, China and Taiwan can allow their currencies to become convertible between the two sides without waiting for other financial cooperation agreements to be signed, visiting People’s Bank of China (PBC) Deputy Governor Su Ning (蘇寧) said yesterday.
Su, who heads a 22-member banking delegation to Taiwan, made the remarks on the sideliness of the cross-strait seminar.
Lee said the two sides need not wait for the signing of an MOU on financial supervision before launching cash convertibility.
Allowing currencies to be convertible could begin as soon as the central banks on the two sides reach an agreement on the practice, Lee said.
Meanwhile, state-run Bank of Taiwan (BOT, 臺灣銀行) chairwoman Susan Chang (張秀蓮) said the bank was ready to launch yuan clearance services.
In response to Su’s earlier remarks, Chang said that without the planned MOU, the two sides could still launch services such as cash convertibility, cash shipment, cash supply and cash recycling.
She said, however, that the central bank had yet to choose a bank in Taiwan that would take charge of yuan clearance services.
The yuan supply in Taiwan comes mostly from the Bank of America and the HSBC Hong Kong branch, Chang said.
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