The Executive Yuan’s surprising appointment last week of Bank of Kaohsiung chairman Lee Ruey-tsang (李瑞倉) as chairman of the Financial Supervisory Commission signals the Democratic Progressive Party (DPP) government’s changing mindset toward the selection of its Cabinet members.
The decision to appoint Lee to lead the nation’s top financial regulator has raised eyebrows because of his relative inexperience in the financial industry. His background is in land administration and national property management.
However, the appointment appears to reflect Premier Lin Chuan’s (林全) intention to count on one of his long-time lieutenants to deal with a spate of financial irregularities, including the lax money laundering controls by Mega International Commercial Bank’s New York branch and a botched tender offer for gaming software developer XPEC Entertainment Inc, which forced former commission chairman Ding Kung-wha (丁克華) to tender his resignation earlier this month.
It also seems to be an attempt to pacify those within the DPP who are against Lin, as a small-scale reshuffle in the Cabinet has been coming for some time, with certain government officials reportedly judged as unfit to help President Tsai Ing-wen (蔡英文) deliver on her campaign promises of financial stability and economic prosperity.
The media last week reported that Kaohsiung Mayor Chen Chu (陳菊) helped Lee get the job. Lee was recruited by Chen in 2011 to head the city’s finance bureau and later became the city’s secretary-general before taking the Bank of Kaohsiung chairmanship late last year.
This has raised speculation that his appointment will enhance the commission’s willingness to cooperate with the Cabinet on politically sensitive issues. It also raises questions about Chen’s role within the DPP. Executive Yuan spokesman Hsu Kuo-yung (徐國勇) wasted no time in clarifying this rumor, saying last week that Lee is an old friend of Lin’s and was a deputy minister of finance in 2005 when Lin served as minister of finance. It is simply that the premier wants his man back, Hsu said.
It is anyone’s guess what the reason behind Lee’s appointment is and who will be the next to go in the Cabinet reshuffle, but policymakers should consider why there is room for such speculation.
For the advancement of the nation’s democracy, the selection of Cabinet members should hinge more on their professional capacity and integrity, rather than their political views or political ideologies.
Lee is the 10th top financial regulator since the market watchdog was created in July 2004, and he is taking on the chairmanship at a time when the nation’s financial industry is facing unprecedented challenges. One of the main issues is that there are still too many banks, insurers and securities brokerages vying for a share of the domestic market.
Many of Lee’s predecessors vowed to support industry consolidation to enhance local firms’ global competitiveness. However, there have been no signs of progress toward this end 12 years after the commission’s former chairman Kong Jaw-sheng (龔照勝) first pitched the idea.
Lee must show he is more reform-orientd than his predecessors, or the road toward further consolidation and liberalization in finance is likely to remain arduous.
Chairing the commission requires determination and Lee needs to implement measures to improve discipline and regain public confidence. He will need to be flexible in new policy implementation that would help the industry cope with the fast-changing international landscape. If Lee can map out visionary strategies and beneficial long-term plans for the industry, it would prove he is not an uncreative official who only follows the old path.
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