Taiwan proposes using postal bank to spur lending

Taiwan’s top financial regulator proposed allowing the government-owned postal bank to put some of its deposits in private banks.

Taiwan’s top financial regulator proposed allowing the government-owned postal bank to put some of its deposits in private banks, as part of broader economic-boosting measures.
The proposal, which would allow the government to tap some of the postal bank’s T$4 tr (USD 119bn) in deposits, is part of a broader package of economic stimulus measures that new Financial Supervisory Commission Chairman Sean Chen proposed to the legislature on Thursday.
Taiwan’s transport ministry oversees the operations of the postal office, Chunghwa Post Co Ltd, and the financial regulator’s moves would require some regulatory changes at the transport ministry.
The proposal could provide lower funding cost for banks, but leaves them with risks of possible bad loans due to financial instability at many companies as many sectors are faced with a slowdown.
Bankers welcomed the move, but said putting more deposits into their systems wouldn’t necessarily make them lend more in the current risky environment that has seen many companies run into financial difficulties due to an economic downturn.
Other measures would include relaxing restrictions on Hong Kong and South Korea-listed firms coming to Taiwan to make second listings, according to a parliament agenda for Thursday morning.
The commission’s move is part of the Taiwan government’s plans to stimulate the economy. ($1 = T$33.6)