A financial milestone was reached in Taiwan in early June with the first successful operation of an officially-backed market exit mechanism aimed at thinning the ranks of the country’s saturated banking sector.
Taiwan has been trying to restrain the expansion of financial institutions and the decline of credit quality in the wake of serious saturation of the banking market. Its efforts have included passage of a law in July 2001 allowing the merger of same-type financial institutions and a statute the following year to permit the formation of cross-sectoral financial holding companies, 14 of which have since been formed.
