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Financial sector support for the real economy


In September 2016, the government introduced a program to encourage the financial sector to support the overall economy, in the hopes of expanding domestic investment and specifically helping young people turn today's creative ideas into tomorrow's businesses. The program capitalizes on the expertise and resources of the financial sector to create an environment that promotes industrial growth, innovation and job creation. Effective risk-management measures are also in place to improve the financial system's ability to boost the real economy. And as businesses prosper and banking institutions enjoy higher growth in turn, the nation will see all-around wins for the goods and services industries as well as the financial sector.

Four strategies

Provide corporate financing: The program encourages domestic banks to strengthen financial services for small and new businesses and to help more small and medium-sized enterprises access capital. Banks are also encouraged to provide, in a risk-controlled manner, necessary working capital to companies in the "five plus two" innovative industries or industries related to the New Southbound Policy.

Improve access to capital: Taiwan's multilayered capital market system—comprising the Taiwan Stock Exchange, the over-the-counter Taipei Exchange, and two smaller boards for emerging stocks and startup firms—is designed to meet diverse business needs while protecting investors at the same time. The startup board and equity crowdfunding platforms provide channels of financing for small and emerging firms, as well as large companies with unique business models, for eventual listing on the nation's two main bourses.

Finance companies through venture capital or direct investment: Banks are now permitted to hold 100 percent stakes in venture capital firms, and may direct these firms to invest in the "five plus two" industries and cultural and creative industries. Insurance companies also have a variety of means for investing in real industries, including in infrastructure, long-term care companies, and the "five plus two" industries.

Promote innovative fintech experiment mechanism: In addition to implementing the Financial Technology Development and Innovative Experimentation Act, the government provides the financial technology ("fintech") industry with essential assistance, guidance and consultation.

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