The Financial Supervisory Commission on Wednesday last week decided to punish Mega International Commercial Bank by imposing a fine of NT$10 million (US$315,567), barring it from opening overseas branches and ordering the removal of six executives, as the bank’s poor corporate governance and internal controls led to a US$180 million fine by US regulators last month for breaches of the US’ Bank Secrecy Act.
The commission said its punitive measures against Mega Bank were due to the state-run bank’s inadequate management of its overseas branches, as well as the bank’s failure to implement an effective compliance mechanism after it was accused by the New York State Department of Financial Services of failing to report suspicious transactions in 2012 between its New York and Panama branches.
The commission might mete out more discipline if further irregularities are uncovered. However, thus far, the commission’s punishment of Mega Bank is stiff and unprecedented, while the order to dismiss the six executives — including former chairman Mckinney Tsai (蔡友才) — means that these executives may not take any management positions at banking or financial institutions in the next five years, even though Tsai had already resigned from his post before the announcement.
Did those executives apologize to the bank’s major shareholders, including the Ministry of Finance and taxpayers, for their poor management? Unfortunately, they have yet to do so, but people would like the government to seek compensation from responsible parties to protect taxpayers’ interests. Furthermore, the public also hopes that the government can get to the bottom of the case and prosecute those responsible, including former and current officials at the ministry and the commission, as the oversight problem is deep-rooted in the nation’s financial sector.
People should not think that the case is closed for Mega Bank. For US regulators, the US$180 million fine was just part of a consent order issued by the department, in which the bank also agreed to engage an independent monitor to conduct a comprehensive review of its compliance program and address the bank’s money laundering controls. In Taiwan, besides the commission’s punitive measures, the bank should be prepared to face rigorous public scrutiny over improvements to its legal compliance and corporate governance issues.
Taiwanese regulators might consider imposing heavier punishments to prevent similar compliance mishaps. According to local media reports, some lawmakers across party lines are proposing an amendment to the Banking Act (銀行法), in which they suggest removing the limits on fines and revoking the operating licenses of violators in serious cases.
Removing the limits on fines has already been implemented through an amendment to the Financial Consumer Protection Act (金融消費者保護法), which was approved by the legislature in January last year, to help regulate the sale of financial products — such as highly controversial yuan-linked target redemption forward financial derivative products — while protecting the rights of consumers.
Regardless of how much heavier penalties might become, the Mega Bank case has taught the nation that the key issue lies with the effective enforcement of standard operating procedures in terms of risk control and legal compliance, with internal auditing officials conducting regular checks and promptly reporting the results to the board of directors.
Meanwhile, the board of directors, major stakeholders and regulatory agencies must place equal importance on ensuring a bank’s integrity and managerial efficiency, in addition to its compliance with legal requirements.
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
The past few months have seen tremendous strides in India’s journey to develop a vibrant semiconductor and electronics ecosystem. The nation’s established prowess in information technology (IT) has earned it much-needed revenue and prestige across the globe. Now, through the convergence of engineering talent, supportive government policies, an expanding market and technologically adaptive entrepreneurship, India is striving to become part of global electronics and semiconductor supply chains. Indian Prime Minister Narendra Modi’s Vision of “Make in India” and “Design in India” has been the guiding force behind the government’s incentive schemes that span skilling, design, fabrication, assembly, testing and packaging, and
As former president Ma Ying-jeou (馬英九) wrapped up his visit to the People’s Republic of China, he received his share of attention. Certainly, the trip must be seen within the full context of Ma’s life, that is, his eight-year presidency, the Sunflower movement and his failed Economic Cooperation Framework Agreement, as well as his eight years as Taipei mayor with its posturing, accusations of money laundering, and ups and downs. Through all that, basic questions stand out: “What drives Ma? What is his end game?” Having observed and commented on Ma for decades, it is all ironically reminiscent of former US president Harry