In a symposium on finance and the economy on August 21, Premier Sean Chen said the finance industry has played a crucial role in Taiwan's economic development, and he encouraged it to become more high-tech, internationalized and specialty-oriented.
He also said that legal restrictions have hampered the financial sector's development over the last decade and expressed hope that the forum's exchange of views about how to relax these restrictions would help clear the way for more vigorous industry growth in the future.
The event, presided over by the premier, was the third of a series of Executive Yuan symposiums focusing on financial issues. More than 40 industry representatives, including members of financial holding companies, banks, the securities and futures industry and insurance companies, attended and exchanged their views with the premier and officials from related agencies.
The main topics discussed were how to improve asset management, how to develop services tailored to the special needs arising from Taiwan-mainland trade and how to boost the financial industry's overall competitiveness.
Chen thanked banking representatives for putting forward various suggestions at the forum and said the following in his closing remarks:
1. Most of the suggestions proposed by the industry representatives have been incorporated into two of the Financial Supervisory Commission's (FSC) projects, "Money Management Platform for Taiwanese Citizens" and "Financial Businesses with Cross-strait Characteristics," with the latter containing 10 major ventures that are very important to the development of the financial sector. The premier ordered the FSC to continue aggressively promoting these projects.
2. The goal of "Money Management Platform for Taiwanese Citizens" is for Taiwanese people to deposit their money in domestic banks, which would then invest their money globally and bring back high returns. According to the premier, this would not only be conducive to the industry's development; it would also help keep professional talent in Taiwan and cultivate and attract new talents to the island.
3. The infusion of the insurance sector's capital into public welfare businesses such as infrastructure construction and long-term care services will create a win-win-win situation for policyholders, the public and the nation's economy. The FSC will soon invite the concerned ministries and commissions to study suitable investment objectives and related technical problems. If further coordination is needed, the FSC must report the situation to the Executive Yuan.
4. The ROC Bills Finance Association's suggestion that the Taiwan Bills Index Rate be used in domestic contracts should be adopted. The central bank and the FSC should offer assistance in this regard, and the financial sector should support this cause.
5. Regarding the financial sector's suggestion that the government commission a portion of the overseas investments of the four major public funds (Public Service Pension Fund, Postal Savings Fund, Labor Insurance Fund and Labor Pension Fund) to domestic asset-management companies, the premier said the proposal should be forwarded to the task force on raising the operational efficiency of government funds for study. This task force was established jointly by the Executive Yuan and the Examination Yuan and is co-presided by the vice premier and the Examination Yuan's vice president.
6. The premier directed the Ministry of Finance and the Financial Supervisory Commission (FSC) to set up a task force, to be presided by Minister without Portfolio Kuan Chung-ming, to study the financial industry's tax issues under the principles that such reforms should not affect government revenues and should help reduce government expenditures, including future expenditures.
7. The Foreign Exchange Control Act stipulates that only designated banks can conduct foreign-exchange businesses. However, in consideration of the needs of major insurance and securities companies, the premier asked the Central Bank to study the possibility of extending the right to conduct foreign exchange operations to such financial institutions.
In addition, the FSC pointed out that developing Taiwan as a major wealth management platform for Taiwanese citizens and expanding cross-strait financial business operations are major industry development strategies laid out in the government's "Golden Decade, National Vision" plan.
Plans to expand cross-strait finance include the following:
1. Launching renminbi-denominated operations at all designated foreign-exchange domestic banking units
2. Establishing financial transaction platforms
3. Implementing mechanisms to facilitate cash flow for e-commerce
4. Allowing credit and debit cards to be fully accessible to markets on both sides of the strait
5. Helping financial institutions set up shop on the Chinese mainland to distribute services to Taiwanese businesses
6. Allowing sound overseas enterprises with Taiwanese backgrounds to be listed in the Taiwan Stock Exchange or GreTai Securities Market
7. Allowing publicly listed companies to issue renminbi-denominated bonds or other financial tools for raising funds
8. Developing asset and wealth management operations in the greater Chinese area
9. Augmenting the relevant operations and services of insurance companies
10. Supervising and assisting in the removal of obstacles to attain favorable conditions for entry to the mainland market