The central bank asked commercial lenders to lower their prime rates, saying they're still charging borrowers too much after 11 central bank rate cuts over the past year. \nCentral Bank of China officials met with 17 small and medium-sized banks yesterday to urge them to drop their prime rates from an average 8.5 percent, said an official in the central bank's banking department, who asked not to be identified. \nThe central bank has slashed its key rate 2 1/2 points to a record-low 2.25 percent since last December in an effort to revive investment and spending and pull Taiwan out of its deepest economic slump in more than a quarter-century. \nThe bank gave lenders including Ta Chong Bank Ltd (大眾銀行), Dah An Commercial Bank (大安銀行), Shanghai Commercial Bank (上海銀行) and International Bank of Taipei (台北國際銀行) 45 days to consider lowering the rates they charge their best customers. It wants to bring them closer in line with the 6.79 percent rate charged by state-controlled Bank of Taiwan (台灣銀行). \n``The reason for [banks] to maintain high prime rates is that they want to make more from consumer loans to cover the losses they're making on corporate lending,'' said Sophia Cheng, banking analyst at Merrill Lynch Taiwan Ltd. \nSo far, central bank rate cuts haven't spurred borrowing and investment. Taiwan's economy shrank 4.2 percent in the third quarter from a year earlier and contracted 2.4 percent in the second quarter -- its first recession since the mid-1970s. \nRate reductions aren't reaching borrowers as some banks trim their rates only slightly, the central bank said. International Bank of Taipei, for example, said its prime rate has fallen less than one percentage point this year, to 8.3 percent from 8.39 percent at the beginning of the year. \nEven if lower bank rates fueled demand for credit, banks may be reluctant to lend as bad loans mount. The government said more than 11 percent of bank loans were delinquent at the end of September. \nGoldman Sachs Group Inc estimates the share of bad loans may be as high as 25 percent, said David Chang, a managing director at Goldman Sachs in Taiwan. That means bankers are reluctant to extend new credit.
‘NO EQUILIBRIUM’: Taiwan’s increased defense spending is a good step, but it needs to do more to have the ability to deter aggression from China, a senior US official said The US plans to sell as many as seven major weapons systems — including mines, cruise missiles and drones — to Taiwan, four people familiar with the discussions said. Pursuing seven sales at once is a rare departure from years of precedent in which US military sales to Taiwan were spaced out and carefully calibrated to minimize tensions with Beijing. However, US President Donald Trump’s administration has this year become more aggressive with China, and the sales would land as relations between Beijing and Washington are at their lowest point in decades over accusations of spying, lingering trade tensions, disputes about the
CLOSE ENCOUNTERS: Several of the PLA fighter jets that crossed the median line of the Strait came within 68km of Hsinchu, drawing warnings from Taiwan, the ministry said At least 18 Chinese military aircraft yesterday flew into the nation’s air defense identification zone (ADIZ) on the second day of a US delegation’s visit, the Ministry of National Defense said, adding that the military responded by deploying an air defense missile system to monitor their activities. A delegation led by US Undersecretary of State for Economic Growth, Energy and the Environment Keith Krach on Thursday started a three-day visit to Taiwan. The ministry from Thursday started publicizing the actions of the Chinese People’s Liberation Army (PLA) in Taiwan’s ADIZ on its Web site and Twitter. According to ministry reports, 18 PLA aircraft
WORKING OVERTIME? NTU professor Lee Duu-jong denied that he had held a part-time position at a Chinese university or joined China’s Thousand Talents Program A candidate for the post of National Taiwan University of Science and Technology (NTUST) president yesterday dropped out of the race following a report questioning his links to Chinese academia and government programs. Lee Duu-jong (李篤中), a professor at National Taiwan University’s (NTU) chemical engineering department, was a member of China’s Changjiang Scholars’ Program in 2006 and was on the list of its Thousand Talents Program in 2017, a report by Chinese-language Mirror Media magazine said yesterday. The article said that Lee is suspected of having held a part-time job at the Harbin Institute of Technology in China and was the recipient
TWO CASES: The five allegedly conspired with conglomerates, threatening the nation’s governance and subverting the rules of ethical conduct, a deputy chief prosecutor said Taipei prosecutors yesterday charged three legislators and one former lawmaker with contravening the Anti-Corruption Act (貪污治罪條例) in a case linked to former Pacific Distribution Investment Co (太平洋流通) chairman Lee Heng-lung’s (李恆隆) battle with the Far Eastern Group (遠東集團) over ownership of the Pacific SOGO Department Store (太平洋崇光百貨) chain, while independent Legislator Chao Cheng-yu (趙正宇) was indicted in a separate case involving two funeral services companies and a plot of land in a national park. Chinese Nationalist Party (KMT) legislators Chen Chao-ming (陳超明) and Sufin Siluko (廖國棟), Democratic Progressive Party (DPP) Legislator Su Chen-ching (蘇震清) and former New Power Party legislator