Taipei, Aug. 21 (CNA) President Chen Shui-bian said Wednesday that financial reforms are crucial to Taiwan's economic development and he expressed the hope that the government will be able to deliver a "brilliant" result in two years.
The president made the remarks when he received the participants in a financial symposium sponsored by Taiwan Hakka Association.
Chen said he hopes to achieve two goals within two years--to cut the ratio of overdue loans of financial institutions to below 5 percent and to raise the level of capital availability to more than 8 percent--in order to strengthen the country's financial structures.
He noted that the ratio of overdue loans of domestic banks stood at 7.7 percent, while the ratio of the grass-roots financial institutions was as high as 16.39 percent, as of the end of 2001, representing a total amount of NT$1.7 trillion (US$498.53 million) and posing a potential threat to financial stability. "This is the reason why I have been tackling the matter after I assumed the presidency in May 2000," the president added.
Chen also said that the NT$140 billion (US$4.1 billion) financial rehabilitation fund, which was set up to help write off bad loans, accounts for only 1.4 percent of gross domestic product, which is low in comparison with the 2 percent in the United States, 12 percent in Japan, and 18 percent in South Korea.
He said the rehabilitation fund needs to be expanded if it is to deal with the financial problems quickly.