Despite strong opposition from academia, the Executive Yuan has decided to charge the Council of Agriculture (COA) with supervising farmers' and fishermen's credit cooperatives, Vice Minister of Finance Susan Chang (
"In order to consolidate the nation's agricultural development and finance under the same regulatory umbrella, the COA will replace the Ministry of Finance [MOF] and play a key role in grassroots financial reforms," Chang said at a hastily called press conference yesterday afternoon.
Chang said that the MOF will help draft a new agricultural financial law (
The MOF's three-tier risk-control mechanism, which was implemented in early September to tighten regulation of the cooperatives' lending and saving practices, was abruptly suspended on Sunday, stifling the ministry's hopes of resolving the problem itself.
The government's U-turn comes ahead of a planned protest in Taipei on Saturday by tens of thousands of farmers and fishermen opposed to the just-suspended measures.
However, Chang was hard-pressed to clarify the Cabinet's new position at yesterday's press conference, creating more confusion.
Because of a lack financial expertise, the COA will tackle the task by hiring new government regulators to handle the agricultural sector's financial affairs, Chang said.
When questioned by the media whether the Cabinet's policy reversal contradicted its plan to establish a Financial Supervisory Board (FSB) to centralize regulation of the nation's banking sector, Chang said only that the credit units would be independent from the yet-to-be-established FSB's supervision.
Nevertheless, Chang said that the Financial Restructuring Fund (
Citing the example of Japan's Norinchukin Bank Ltd -- the central bank for Japan's agricultural cooperatives -- Chang said that Taiwan will set up a national agricultural bank to absorb the nation's 278 agricultural lenders.
"The new agricultural bank will have capital of at least NT$10 billion and 20 percent of its shares can be purchased by the government," Chang said.
Analysts criticized the government's new plan yesterday, saying that the COA, short of financial talent, experience and objectiveness, would worsen the non-performing loan (NPL) problem.
"The COA is good at promoting agriculture, but not good at monitoring financial institutions. The government's policy will make things worse because the COA is void of financial talent," said Hsu Chen-min (
Hsu said that financial issues should be in the hands of Ministry of Finance, otherwise, "The government's financial management will head in different directions."
"The government's policy will make the COA both the player and referee and undoubtedly send the NPL ratio skyrocketing again," he said.
The average NPL ratio at Taiwan's grassroots financial institutions is 21.5 percent.
An analyst from ABN Asset Management said the COA is not capable of monitoring these units because it has no expertise in dealing with NPLs.
"They have no talent and no expertise," the analyst, Jones Wang (
He added that some foreign investors have started to question the government's determination to reform the financial sector.
‘UPHOLDING PEACE’: Taiwan’s foreign minister thanked the US Congress for using a ‘creative and effective way’ to deter Chinese military aggression toward the nation The US House of Representatives on Monday passed the Taiwan Conflict Deterrence Act, aimed at deterring Chinese aggression toward Taiwan by threatening to publish information about Chinese Communist Party (CCP) officials’ “illicit” financial assets if Beijing were to attack. The act would also “restrict financial services for certain immediate family of such officials,” the text of the legislation says. The bill was introduced in January last year by US representatives French Hill and Brad Sherman. After remarks from several members, it passed unanimously. “If China chooses to attack the free people of Taiwan, [the bill] requires the Treasury secretary to publish the illicit
A senior US military official yesterday warned his Chinese counterpart against Beijing’s “dangerous” moves in the South China Sea during the first talks of their kind between the commanders. Washington and Beijing remain at odds on issues from trade to the status of Taiwan and China’s increasingly assertive approach in disputed maritime regions, but they have sought to re-establish regular military-to-military talks in a bid to prevent flashpoint disputes from spinning out of control. Samuel Paparo, commander of the US Indo-Pacific Command, and Wu Yanan (吳亞男), head of the People’s Liberation Army (PLA) Southern Theater Command, talked via videoconference. Paparo “underscored the importance
CHINA POLICY: At the seventh US-EU Dialogue on China, the two sides issued strong support for Taiwan and condemned China’s actions in the South China Sea The US and EU issued a joint statement on Wednesday supporting Taiwan’s international participation, notably omitting the “one China” policy in a departure from previous similar statements, following high-level talks on China and the Indo-Pacific region. The statement also urged China to show restraint in the Taiwan Strait. US Deputy Secretary of State Kurt Campbell and European External Action Service Secretary-General Stefano Sannino cochaired the seventh US-EU Dialogue on China and the sixth US-EU Indo-Pacific Consultations from Monday to Tuesday. Since the Indo-Pacific consultations were launched in 2021, references to the “one China” policy have appeared in every statement apart from the
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
RSS