With around 50 to 60 percent of the nation's banking assets controlled by state-run entities, financial regulators are under pressure to meet President Chen Shui-bian's (陳水扁) ambitious goal of halving the number of state banks to six by the end of this year. Though consolidation tops the government's financial reform agenda as a way to increase the competitiveness of local banks, the pace of merger activity has been slow, despite some merger and acquisition deals being sealed in the past few years.
Minister of Finance Lin Chuan's (
Taiwan Business Bank is the nation's ninth-largest lender by assets, with a market share of 4.1 percent and a distribution network of 125 branch offices. It is 41 percent owned by the Ministry of Finance and a few other state banks. Though it has the political mission of granting loans to small and medium-sized enterprises, the bank's market share in this niche is only 12 percent due to strong competition. But because of its past weakness in credit appraisal in its role as a funding channel for particular economic sectors, this lender has lost an average of NT$1.6 per share in each of the past four years.
Critics are concerned that the ministry's failure to sell its stake in Taiwan Business Bank may lead to a more cautious approach by potential buyers of domestic banks, given higher-than-expected integration risks such as strained labor relations. Market observers also worry that the four-day work stoppage by the bank's union could inspire other state bank unions to follow suit and obstruct mergers in the future. Chang Hwa Commercial Bank's (
Moreover, the Taiwan Business Bank incident has caught lawmakers' attention, and may prompt them to demand reviews of every government proposal on disposing of state bank shares. It will certainly increase uncertainty for investors and make it more difficult to reach Chen's target.
The planned privatization of the Central Trust of China (
Even so, the government should learn something from the incident and act to respond to investors' demands for a more open and transparent bidding process. Most importantly, the government needs to convince the market of its political will to proceed with privatization. If the government stops pushing forward, the market will take it as a sign that something is terribly wrong with the policy.
Labor disputes may have been the straw that broke the camel's back as far as Taiwan Business Bank is concerned. But even before those troubles, the bank's poor asset quality and performance made potential buyers far underbid the finance ministry's price targets.
This should teach both management and employees the lesson that their main responsibility is to strengthen the bank's operating efficiency, because successfully privatizing the bank is in the entire nation's interest. Anyone who jeopardizes that privatization and thus hurts the bank's business returns will therefore not be forgiven, even if they do so in the name of job security.
The gutting of Voice of America (VOA) and Radio Free Asia (RFA) by US President Donald Trump’s administration poses a serious threat to the global voice of freedom, particularly for those living under authoritarian regimes such as China. The US — hailed as the model of liberal democracy — has the moral responsibility to uphold the values it champions. In undermining these institutions, the US risks diminishing its “soft power,” a pivotal pillar of its global influence. VOA Tibetan and RFA Tibetan played an enormous role in promoting the strong image of the US in and outside Tibet. On VOA Tibetan,
Sung Chien-liang (宋建樑), the leader of the Chinese Nationalist Party’s (KMT) efforts to recall Democratic Progressive Party (DPP) Legislator Lee Kun-cheng (李坤城), caused a national outrage and drew diplomatic condemnation on Tuesday after he arrived at the New Taipei City District Prosecutors’ Office dressed in a Nazi uniform. Sung performed a Nazi salute and carried a copy of Adolf Hitler’s Mein Kampf as he arrived to be questioned over allegations of signature forgery in the recall petition. The KMT’s response to the incident has shown a striking lack of contrition and decency. Rather than apologizing and distancing itself from Sung’s actions,
US President Trump weighed into the state of America’s semiconductor manufacturing when he declared, “They [Taiwan] stole it from us. They took it from us, and I don’t blame them. I give them credit.” At a prior White House event President Trump hosted TSMC chairman C.C. Wei (魏哲家), head of the world’s largest and most advanced chip manufacturer, to announce a commitment to invest US$100 billion in America. The president then shifted his previously critical rhetoric on Taiwan and put off tariffs on its chips. Now we learn that the Trump Administration is conducting a “trade investigation” on semiconductors which
By now, most of Taiwan has heard Taipei Mayor Chiang Wan-an’s (蔣萬安) threats to initiate a vote of no confidence against the Cabinet. His rationale is that the Democratic Progressive Party (DPP)-led government’s investigation into alleged signature forgery in the Chinese Nationalist Party’s (KMT) recall campaign constitutes “political persecution.” I sincerely hope he goes through with it. The opposition currently holds a majority in the Legislative Yuan, so the initiation of a no-confidence motion and its passage should be entirely within reach. If Chiang truly believes that the government is overreaching, abusing its power and targeting political opponents — then