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Suggestions of the 2007 Workshops between Fourteen Financial Holding Companies and Financial Supervisory Commission
The Financial Supervisory Commission (FSC) had held the workshops with the chairmen and the presidents of the fourteen financial holding companies from August 2 to 22, 2007. In the workshops, each financial holding company explained its operation status, the allocation of assets and the strategies of its future operation development while the Financial Supervisory Commission provided its business report, and explained relevant financial supervision policies, financial integration, the separation of the financial industry from the manufacturing industry, and supervision system. The FSC indicated that it hoped that the financial enterprises provided more comments on the above significant financial policy issues to promote the increase of competitiveness of the financial industry together.
Each financial holding company of the workshops this time proposed some related words based on its core operations (the fields of insurance, banking, securities and transactions instruments) and most of the words were workable. Among these words, important suggestions and circumstances of handling that were explained to each financial holding company by the FSC are as follows:
1. With respect to the suggestion that the subsidiaries of a financial holding company that deal with common marketing are free from establishing professional counters, the FSC has deleted the provision concerning the mandatory separation between places and personnel from the draft amendment of the Financial Holding Company Act which was submitted to the Executive Yuan for review and has added to the draft amendment the provision which provides that business staff and services items shall be identified by customers easily. If any provisions of the draft amendment concern administrative orders that can be dealt with, such as the simplification of the application procedure, the Commission is actively amending them.
2. With respect to the suggestion of allowing the insurance industry to invest in foreign IPO stocks and the suggestion that the appropriation of surplus of a financial holding company with sound finance and business practices should not be restricted by the Banking Act of the Republic of China, related insurance acts and regulations are amended actively and cooperatively. In the same way, the appropriation of surplus of the banking industry has been incorporated into the draft amendment of the Banking Act of the Republic of China; and basically, the suggestions of the enterprises were adopted in such a way that the capital adequacy ratio of a bank is taken as the basis for considering the appropriation of surplus.
3. As regards the issue that financial holding enterprises were deeply concerned that the implementation of the Consumer Debt Clearance Act might affect credit order and credit decision making of a financial institution, the FSC indicated that the Act has deleted the special provision provided in the original draft – that provision was Article 55 which provided that a debtor might select and perform one of the loan repayment schemes formulated for the residence house loans. Moreover, if a debtor is indebted to a financial institution, he/she/it shall, before his/her/its declaration for regeneration or clearance, request for a negotiation from the financial institution to which he/she/it owes the largest amount of debts. With respect to relevant enforcement rules, in the same way, the FSC will, with the reference to the edition of the Bankers Association of the Republic of China and the consideration of the balance between creditors and debtors, communicate with the Judicial Yuan.
4. With regard to the suggestion, loosening investment caps of equity products of bills companies, the FSC is studying the suggestion. In addition, in order to promote diverse development of businesses of bills companies, disperse business risks of the bills companies and expand the scale of trading foreign currency and bonds, the bills companies’ handling of businesses on foreign currency and bonds will be opened up and related regulations have been pre-announced.
5. As the suggestion to loosen the limits of loans for construction is to avoid commercial banks from excessively expanding the restrictions placed on granting loans for construction, to maintain adequate mobility of bank assets, 30% of the total amount of the bank deposits and the financial bonds is the ceiling for assuming the said loans. Furthermore, the major projects, policy-related loans such as people having their own homes, or the reconstruction of the old residential military community, all have been excluded by the proviso provision and banks are provided with more space for assumption of loans for construction. In the same way, until the end of June, 2007, the total amount of loans for residential construction and for enterprise construction granted by the financial institutions was NT$ 4,190 billion and the assumption ratio, in average, amounted approximately 19%, and therefore, the current provision is still upheld.
The workshops this time followed the meeting which was held by the FSC for the first time for an informal discussion with the senior managers of the fourteen financial holding companies last year and it was the second time that the workshops were held for a two-way communication between the FSC and the financial holding companies. All of the financial holding companies indicated that the mode of the interaction between the two sides of the meetings this time was considerably beneficial to promoting a sound development of the financial industry. The FSC indicated that it would then continue to hold meetings similar to the meetings where the interactions between it and the companies took place. |