Financial Supervisory Commission Chairman William Tseng (曾銘宗) yesterday said that he would prioritize amendments aimed at consolidating the nation’s financial holding companies if he is chosen as a Chinese Nationalist Party (KMT) legislator-at-large in February.
Last month, the KMT confirmed that Tseng is among its top 12 nominees for legislator-at-large positions. The 12 are virtually assured of getting legislative seats.
There are currently 16 domestic financial holding companies, but the ideal number would be half that amount, Tseng said at a question-and-answer session at the legislature in Taipei yesterday.
Photo: Wang Meng-lun, Taipei Times
Tseng, who has long been a proponent that the nation’s financial sector should pursue other Asian markets, said that the endeavor would require minimum assets of about NT$10 trillion (US$30.36 billion).
However, Cathay Financial Holding Co (國泰金控), the nation’s largest financial holding company by assets, falls short of that requirement, with its total assets tallied at about NT$7.1 trillion.
Funds and resources are dispersed across too many companies, Tseng said.
He said that the 49 director’s seats held by government-affiliated shareholders are hampering innovations in the nation’s financial sector.
Despite their massive assets, the eight state-run financial holding companies, including Taiwan Financial Holding Co (台灣金控) and Mega Financial Holding Co (兆豐金控), lag behind the sector leaders — privately owned Cathay Financial and Fubon Financial Holding Co (富邦金控) — in terms of earnings.
Board members of state-run financial holding companies have attributed their lagging performance to the lack of insurance units.
With only a month left in his term at the commission, Tseng said that he is most proud of expanding the trading band on the Taiwan Stock Exchange to 10 percent from 7 percent, in addition to numerous other market stimulus policies.
However, he said that it is regretful that among the 26 mergers and acquisitions the commission has approved in the past two and a half years, none of them were between financial holding companies.
Tseng said he expects daily stock market turnover to average about NT$130 billion following the abolition of the controversial capital gains tax.
In addition, eased limits on market transactions, such as expanded margin utilization and day trading, are expected to help boost daily turnover by between 15 percent and 20 percent, he said.
Meanwhile, as the commission mulls allowing Chinese retail investors on the local bourse, Tseng said that they are likely to prefer mutual funds and exchange traded funds.
As of Friday, daily turnover on the local bourse averaged NT$117.6 billion.
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