Taiwan financial sector faces large risk in Vietnam
By Ted Chen, The China Post
May 15, 2014, 12:06 am TWN
TAIPEI, Taiwan -- Following the outbreak of anti-China riots and escalating violence, Tseng Ming-chung (曾銘宗), chairman of the Financial Supervisory Commission, yesterday stated that the risk exposure of Taiwan's financial institutions operating in Vietnam amounts to NT$79.3 billion.
Anti-China riots in Vietnam's southern Binh Duong Province had been escalating, with violent mobs numbering in the thousands marauding through factories purported to be China-owned, with many Taiwanese facilities caught in the cross fire.
According to Tseng, Vietnam-based branch and service locations set up by Taiwanese financial institutions were last tallied at 53. An emergency bulletin had been broadcast to financial services personnel currently residing in Vietnam, advising them to issue alerts in the event of catastrophic developments. Tseng assured reporters yesterday that no reports of major property loss and casualties have been issued by Taiwanese financial institutions operating in Vietnam.
In addition, the FSC is closely monitoring the latest developments in conjunction with banking and life insurance associations.
Tseng, however, stated that amid reports of severe property loss in Vietnam-based production facilities of numerous Taiwanese companies, currently governing bodies are unable to provide an estimate of the total damage and property loss sustained. Tseng allayed concerns by saying that no crippling impact is expected for the Taiwan market.
Most notably, Tseng stated that Taiwan's ambitions in competing in the regional financial market's "pan-Asian championship" should not be deterred by the outbreak of a short-term obstacle. "One's sights should include the distant horizon, and not fixate on the events of the past two days," Tseng said.
Meanwhile, the Securities and Futures Bureau (證期局) is mulling over a change to raise the 40 percent cap on overseas investments. According to the bureau, a number of brokerage operations by more aggressive companies including Yuanta (元大), and KGI (凱基) are approaching their allowed limits, preventing them from further expansions and acquisitions. The bureau stated that decisions to increase the limit to beyond 40 percent will be announced toward the end of June.