Association to conduct meeting with government over ‘3rd financial reform’

By Ted Chen ,The China Post

TAIPEI, Taiwan — A business association yesterday announced that a meeting has been scheduled on April 16 with Premier Jiang Yi-huah and Ministry of Finance officials to discuss plans concerning the third financial reform.

The China National Association of Industry and Commerce, Taiwan (CNAIC, 工商協進會) indicated that additional issues including the fate of Taiwan’s Fourth Nuclear Power Plant, and the annuity labor pension system will be addressed in the scheduled meeting with the government.

CNAIC Chairman Kenneth C. M. Lo (駱錦明) said he endorses former Finance Minister Yen Ching-chang (顏慶章) to head the planned taskforce that will oversee the third financial reform.

Citing Yen’s experience and performance as finance minister during Taiwan’s first financial reform in 2001, Lo indicated that Yen represents the right man for the job. According to Lo, Yen has a proven track record of providing sound guidance for policies concerning financial reforms, adding that his services are especially needed in light of the recent lack of progress on reforms.

Lo noted that despite the difficulties experienced in the first and second financial reform, the need for consolidation in the financial industry remains critical. Lo indicated support for mergers among state-operated firms, private financial institutions, as well as between private and state-operated institutions.

“Consolidation represents an inevitable path for Taiwan’s financial sector” said Lo, while asserting that “there are no good reasons against consolidation between private and state-operated financial institutions.” Meanwhile, recently reappointed Central Bank Governor Perng Fai-nan (彭淮南) similarly advocated consolidation in the financial industry earlier this month. According to Perng, Taiwan suffers from the phenomenon of “over-banking,” where most of the 40 or so banks are too small to benefit from economies of scale, while recommending that Taiwan should have no more than two state-operated financial institutions.