In what appeared to be a two-pronged effort at house-cleaning in the financial sector, Minister of Finance Yen Ching-chang (顏慶章) on Friday replaced the heads of both Chiao Tung Bank (交通銀行) and Taiwan Cooperative Bank (合作金庫).
Local media cited the finance minister as the force behind the move in which Taiwan Cooperative Bank Chairman Lee Wen-hsiung (李文雄) will retire to make way for Chiao Tung Bank Chairman Liang Cheng-jin (梁成金). Meanwhile, Evergreen Group (長榮) vice chairman Chang Shen-chi (鄭深池) will take over at the Chiao Tung Bank, the nation's seventh-largest bank by market value.
Officials at the finance ministry refused to confirm the news yesterday, saying any further comment would have to come from Yen himself.
The move appears to be aimed at further ridding the government of business leaders with ties to the former ruling party, the KMT.
The new head of Chiao Tung Bank, Chang Shen-chi, is the son-in-law of Taiwan shipping magnate Chang Yung-fa (
Besides acting as vice chairman at Evergreen, the younger Chang also sits on the board of a number of firms, including Fubon Bank (
Since Chen took power in May last year, the DPP-led government began removing those appointed by the previous administration from state-run companies.
In May, Chen sent the chairman of China Steel Corp (
One financial analyst who requested anonymity said the move was a financially sound one. The former chairman of Chiao Tung Bank will be the new head of the Taiwan Cooperative Bank, Taiwan's second-largest lender.
The analyst said that because Taiwan's banking sector is riddled with bad loans, someone needs to step in to stem the flow of red ink.
As Taiwan's economy slumps further, more and more banks are expected to run into problems because "the overdue loan ratio in local banks continues to rise, some even to a level government officials are reluctant to deal with," he said.
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