The government has also drafted a financial holding company law, which will give banks more leeway to carry out various mergers and acquisitions. The Legislative Yuan is expected to pass the latter soon. While the legal groundwork has been laid, not much action has taken place so far.
The restructuring also comes as a double whammy for the DPP government, as its ability to carry on serious reforms is hindered by a sharp correction in the domestic economy, particularly the global high-tech sector.
As unemployment rises and the demand for social programs increases, the government has no choice but to waffle on the tough decisions often associated with corporate and financial restructuring.
While mergers are integral to any restructuring, they also mean doing away with redundant workers, which will not help the rising jobless rate.
All in all, the government has begun the hard job of restructuring the banking industry, but the difficulty, it seems, is in carrying it forward.
RSS