Thu, Nov 07, 2013 - Page 13 News List

Bank to support FSC offshore policies

CONSENSUS:The central bank and the FSC have reached agreement on deregulating more than 60 products at offshore businesses, the central bank governor vowed

By Amy Su  /  Staff reporter

Central bank Governor Perng Fai-nan (彭淮南) yesterday said the bank will support the financial deregulation of offshore banking unit (OBU) and offshore securities unit (OSU) businesses pushed by the Financial Supervisory Commission (FSC).

However, on the idea of including new financial tools in the government’s planned “free economic pilot zones,” Perng said he still believed the zones’ financial markets would need to be well-regulated to avoid possible trading irregularities that hurt the economy.

His remarks came after local media reported in the past two days that the central bank and the FSC held different views over financial deregulation under the pilot zones scheme.

In a written report sent to the legislature’s Finance Committee on Tuesday, Perng said that blindly deregulating new financial products without setting up appropriate management may have a negative impacts on financial markets. In the report, the bank cited the negative impact on the New Taiwan dollar from offshore sales of the US dollar through non-delivery forward trades during the Asian financial crisis in 1997 and 1998.

However, Perng and FSC Chairman William Tseng (曾銘宗) both rejected the speculation of differences when attending a meeting of the legislature’s Finance Committee yesterday.

In terms of financial business, Perng said the pilot zones program is set to deregulate expansion on the scale and financial products at OBU and OSU businesses, with the government only having to amend the Act Governing International Financial Business (國際金融業務條例).

“The financial deregulation actually has nothing to do with the [draft] act of free economic demonstration zones,” Perng said in a legislative question-and-answer session.

The central bank and the FSC have reached a consensus on deregulating more than 60 products at OBU and OSU businesses, with the deregulation expected to be launched prior to the passing of the act of free economic demonstration zone, Perng added.

However, Perng reiterated the importance of financial stability, saying all the capital in the financial sector should be carefully inspected to avoid disorder in the nation’s currency market.

Echoing Perng’s remarks, Tseng said the FSC has no specific schedule to deregulate financial products related to the nation’s currency and interest rates in the free economic pilot zones program.

“In terms of cross-agency businesses, the FSC will only conduct them when reaching a consensus with other related government agencies,” he said.

Minister of Finance Chang Sheng-ford (張盛和) said yesterday the pilot zones program may generate NT$292 million (US$9.91 million) in tax revenue for the nation, citing an evaluation made by the Chung-Hua Institution for Economic Research (中華經濟研究院).

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