Since the Asian financial crisis in 1997, the Taiwanese banking sector has not excelled, but neither has its performance been disastrous. It has recorded consistent profitability while remaining conservative in its ways. With little state encouragement to internationalise, banks have been stuck within Taiwan’s borders for the better part of the past 20 years, making it hard to deal with excess liquidity in the market.
But the change in leadership in the country’s Financial Supervisory Commission (FSC) is generating a long-awaited wave of change. The incumbent government-backed FSC chairman, Ming Chung Tseng, is keen to upgrade Taiwan’s banking sector. He wants to see the country's banks expand across Asia as well as undergo an overdue wave of consolidation. “I believe in a two-wing principle. In one wing, I ask banks to follow laws, regulations and pay attention to risk management. The other wing includes liberalisation, deregulation and foreign development,” says Mr Tseng.
