There are risks involved in blindly seeking to become a global financial hub by overdeveloping the banking sector, the central bank said yesterday.
The central bank issued a 12-page report on analysis of the recent Cyprus banking crisis, concluding with a warning on the risks of excessively developing a nation’s banking sector.
The possibility of launching mergers and acquisitions among state-owned financial institutions in Taiwan has sparked widespread debate recently.
“When it comes to the scale of the financial sector, bigger is not necessarily better,” the bank said in the report.
The report attributed Cyprus’ economic problems to the overdevelopment of its banking sector, similar to the financial crises in Iceland and Ireland a few years ago.
Citing the predicaments of these countries, the central bank said that focusing national resources on becoming a financial center actually gives rise to extremely high risks.
“Raising the scale of a nation’s financial system may help drive up the economy in the short term, but it will also make the sector more vunerable to volatility,” the report said.
In addition, an excessively large financial sector may hurt a nation’s economic growth, the report said, citing research by IMF.
In view of these uncertainties, the central bank said that a nation has to improve the quality of its financial intermediaries and the financial industry to maintain economic momentum.
Taiwanese financial sector representatives last month suggested that the government merge the eight state-owned banks into four to improve their competitiveness.
The much-discussed potential merger between the Bank of Taiwan (台灣銀行) and Land Bank of Taiwan (土地銀行), as well as another involving Hua Nan Commercial Bank (華南銀行), First Commercial Bank (第一銀行) and Chang Hwa Commercial Bank (彰化銀行), have been pointed out as possibilities.
Minister of Finance Chang Sheng-ford (張盛和) last week said that he had raised the issues with both central bank Governor Perng Fai-nan (彭淮南) and Financial Supervisory Commission Chairman Chen Yuh-chang (陳裕璋) in private, reaching a consensus to back the possible mergers among state-owned banks to raise operational efficiency.
However, the government has not yet started formal discussions on the mergers and acquisitions issue between state-owned banks, Chang said.
END TO SPECULATION: The hotel’s management contract has been extended, despite reports that it wanted to end its alliance with Hyatt Hotels over a deal with Riant Capital Singapore-based Hong Leong Hotel Development Ltd (豐隆大飯店股份) yesterday said it has extended a management contract to ensure the continued presence of the Grand Hyatt brand in Taipei, ending rumors that the two sides were parting ways. “We are pleased Hyatt is able to come to terms on the extension of the management contract of Grand Hyatt Taipei,” said Kwek Leng Beng (郭令明), executive chairman of City Developments Ltd (城市發展) and Millennium & Copthorne Hotels Ltd (千禧國敦酒店). Hong Leong Hotel Development is a subsidiary of Millennium, and both fall under the Hong Leong Group (豐隆集團). The Grand Hyatt Taipei (台北君悅大飯店), owned and built by
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
Nintendo Co is raising its target for Switch production to about 25 million units this fiscal year, people familiar with the matter said, as the ongoing COVID-19 pandemic keeps lifting demand and component shortages ease. The Kyoto, Japan-based company, which in April hiked orders to 22 million units by March next year, is asking partners to tack on another few million units, said the people, who did not want to be identified discussing internal goals. Assembly partners plan to work at maximum capacity through December. The new production target suggests that Nintendo is likely to outperform its Switch sales forecast of 19 million
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US