Details on banks in Taiwan and China opening outlets on the opposite sides of the Taiwan Strait could be discussed after memorandums of understanding (MOUs) on financial supervisory cooperation between the two sides come into effect on Jan. 15, Taiwan’s chief financial regulator said yesterday.
Financial Supervisory Commission (FSC) Chairman Sean Chen (陳冲) told lawmakers at the Legislative Yuan that Taiwan and China would develop respective standards for their banks to follow when establishing footholds across the Strait.
Local banks that want to set up operations in China will need to be rated as “good” after factoring in their capital adequacy ratio, non-performing loan (NPL) ratio and NPL coverage ratio, Chen said.
Asked about when banks in Taiwan will be allowed to provide yuan deposit services, Chen said only that the time would be ripe once the number of Chinese visitors to Taiwan “reaches a certain level.”
As for a currency settlement system agreement between Taiwan and China slated to be signed before a proposed economic cooperation framework agreement (ECFA) is sealed, Chen said that in the initial stage, banks on both sides would provide services for the conversion of Taiwanese and Chinese currency in cash, and later provide bank account services.
Chen said the Taiwan Stock Exchange Corp would review an imbalance in supply and demand in response to lawmaker speculation that the prices of Taiwan Depository Receipts (TDR) listed by overseas Taiwanese enterprises on the local market have been inflated.
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