The banks did not protest when the government implemented this plan, but are now falling over themselves to complain about footing a measly NT$13 billion bill from the earthquake. To get the maximum benefit from the disaster, they now have the effrontery to ask that their business tax be reduced to nothing. This will bring another NT$88 billion in windfall profits to banks over the next four years. All in all, it's quite unbelievable how banks hope to cash in on Taiwan's worst natural disaster this century.
The "Guidelines for Banks Assuming Residential Mortgages for Housing Destroyed in the Disaster" issued by the Finance Ministry is intended as an indicator to "mediate" between banks and mortgagees. Under these guidelines, the banks will only write off the sum yet to be repayed minus the value of the land collateral held by the bank, thereby substantially limiting the losses banks might sustain.
Moreover, the Ministry of Finance's plan seeks to end the debt liabilities between banks and debtors as quickly as possible, completely overlooking differences in the position of mortgage holders (eg, the amount outstanding on their mortgage). The government's plan as it stands now is unfair.
This writer believes that the government should instead establish a special law that authorizes the government to assume all of the unpaid balance of victims' mortgages and purchase land owned by banks at a publicly assessed price, thereby nationalizing the property. Remaining mortgage payments should be deposited in a special reconstruction fund (which should also include public donations as well as fines imposed on convicted construction firms). Housing for victims of the earthquake should be built using this fund. In this way, the government would not have to allocate NT$100 billion in loans, increasing the country's and victims' financial burdens.
Ting Wen-sheng is a postgraduate student at the Institute of Labor Research, National Chengchi University.
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