Legislators Request Suspension of Financial Reform

Taipei, Oct. 5, 2005 (CENS)--The financial committee of Taiwan's Legislative Yuan resolved on Oct. 3 to request that the government suspend all projects related to the second round of reform in the island's financial sector, including the release of or swap of government shareholding in government-owned financial institutions.

The resolution was made to express the dissatisfaction of the committee's member legislators over the absence of Vice Premier Wu Rong-I, who was not present to explain the executive branch's policy on the second round of financial reforms.

Although the resolution doesn't have legally binding power, it is likely to have considerable influence on the policy of the Executive Yuan, according to past practices. If the executive branch decides to abide by the resolution, a number of financial reform-related projects will come to a halt, including the separation and sales of the Central Trust of China, the acquisition of Farmers' Bank by Taiwan Cooperative Bank via a share swap, and share releases by the Bank of Taiwan, Land Bank of Taiwan, Taiwan Business Bank, and Chang Hwa Commercial Bank.

Hu Sheng-cheng, chairman of the Council for Economic Planning and Development, pointed out that the Executive Yuan will study the legality of the resolution and do its utmost to maintain the continuing progress of the second round of financial reforms.

Lin Chuan, Taiwan's minister of finance, noted that the executive branch will step up its communications with the Legislative Yuan, adding that "The reduction of government's shareholdings (in financial institutions) should continue to be supported. However, there is not definite schedule (for the second round of financial reform). We will promote financial merger for the sake of its synergy effect, rather than for its own sake."

Kong Jaw-sheng, chairman of the Financial Supervisory Commission, said that the release of the government-owned shares is only part of the second round of financial reform. Despite the Legislative Yuan's resolution, for its part, the committee will continue to carry out its four major missions, including the maintenance of financial stability, continuation of financial reform, assistance for industrial development, and upholding of the interests of investors and consumers, according to Kong.