Wed, Jun 02, 2004 - Page 2 News List

Extension for Restructuring Fund on legislative agenda

CAUCUS AGREEMENT Only the KMT's caucus whip has yet to sign the conclusion reached two days ago on proposed changes to the extension legislation

By Debby Wu  /  STAFF REPORTER

The bill to extend the Financial Restructuring Fund (金融重建基金) for another year was scheduled by the legislature's Procedure Com-mittee yesterday to be discussed on Friday and next Tuesday.

The fund -- modeled after the US' Resolution Trust Corp -- was created in July 2001 and NT$140 billion (US$4.25 billion) was allocated for the following three years to work through the financial sector's bad-debt problems.

The caucuses agreed to an one-year extension, with some conditions, last week. Two days ago, after further negotiations, the caucuses amended the conditions slightly.

The representatives from all the caucuses signed the conclusion of the negotiation two days ago, and the document is now awaiting the signatures of each caucus whip to officially ratify the conclusion.

As of press time, only the Chinese Nationalist Party's (KMT) whip had not signed.

The conditions in the conclusion are basically the same as those set out last week. The main change was the proposal of a clearer timeline for the handling of non-depository liabilities.

The caucuses demanded the Ministry of Finance delete the article which allowed the fund to cover non-depository liabilities in the Deposit Insurance Law (存保法) before Oct. 19 this year, but the non-depository liabilities of banks taken over by the ministry before Jan. 15 next year will still be covered fully.

Other conditions agreed upon earlier include: The fund will be extended for one year, but the ministry is required to study how to handle failed banks and protect depositors' rights through the regular mechanisms provided by the Central Deposit Insurance Corp after the fund expires.

The ministry is also required to report on its findings to the legislature within three months.

The ministry is further required to amend the Deposit Insurance Law in order to detail how to deal with failed banks after the fund expires.

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