Taiwanese Banks Ink Syndicated Loans MOU with Chinese Banks

Five Taiwanese banks and five Chinese banks inked a memorandum of understanding (MOU) for cooperation in extending syndicated loans during the Cross-Strait Entrepreneurs Summit held on Dec. 14-16 in Taipei.

The five Taiwanese banks were the Bank of Taiwan, Taiwan Cooperative Bank, Land Bank of Taiwan, CTBC Bank, and Taipei Fubon Commercial Bank. Their Chinese counterparts were the Bank of China, Bank of Communications, China Development Bank, China Minsheng Bank, and Bank of Nanjing.

J.C. Lee, chairperson of both the Taiwan Financial Holding Co. and Taiwan's Bankers Association, explains that the purpose of the MOU is to reinforce cooperation between banks on the two sides of the Taiwan Strait and to diversify the risk of syndicated loans; for instance, all signatory banks in a syndicated loan consortium have equal rights to payment or compensation. In addition, the banks are encouraged to recommend potential clients to each other and exchange relevant information.

In addition to syndicated loans, other key issues raised by the banking sector during the two-day summit included the establishment of renminbi (RMB) offshore banking markets, abolishment of the 20,000 RMB ceiling on daily remittances, the inking of a ‘swap'  agreement between the two sides, the joint development of overseas markets, the bolstering of alliances between banks and other financial institutions, and promotion of the 'green economy.' (JL)