On Friday night, Shih Jun-ji (
Shih's resignation, which came only five months after he assumed the position, made him the third head of the financial supervisory body to step down since its establishment in July 2004.
"The turnover is way too frequent for such a crucial position," said Shen Chung-hua (
PHOTO: LO PEI-DER, TAIPEI TIMES
Such frequent shakeups could have a negative impact on the nation' financial policymaking and policy continuity, said Shen, one of the winners of the US Eisenhower Fellowship last year.
This could also lead to an unwanted situation wherein government officials are less willing to bring up policies of vision, as they may be easily blamed for every move they make, Shen added.
The Cabinet approved Shih's resignation after it came under heavy fire over the commission's policy turnaround and carelessness, which some believe may have contributed to the expanding troubles in the financial sector.
On Jan. 4, two member firms of the Rebar Asia Pacific Group (
The situation forced the commission to eat its words and take over the already troubled bank at midnight on Jan. 5, five hours after Shih assured the public there was no takeover plan for the lender.
Shen said Shih's handling of the crisis was flawed, probably due to lack of experience or incorrect information.
Nevertheless, as Rebar's financial problems is a longstanding issue, it will be necessary that officials involved be investigated to find out who failed to take action or who prevented the system from bringing the wrongdoers to justice, he added.
The incident dealt an additional blow to the commission, whose reputation had already been seriously dented by a string of scandals.
Last October, former commission member Lin Chung-cheng (林忠正) was taken into custody on charges of corruption. Lee Chin-cheng (李進誠), former director general of the commission's Examination Bureau, was sentenced to 10 years in jail for corruption in June last year.
Last May, the commission's first chairman, Kong Jaw-sheng (龔照勝), was suspended for jobbery in his previous job and was sentenced to seven years in prison on charges of corruption.
A series of proposed policies that were later shelved -- such as the second-stage financial reform to halve the number of financial holding firms, US-dollar denominated offshore stock exchange, lengthened stock trading sessions and anexit mechanism for stocks of petty prices -- have also put the commission at the center of controversies.
If the commission that oversees the nation's financial sector and capital markets cannot adjust its mindset and modus operandi, similar scandals will surely continue to occur, pundits have warned.
"As an umbrella body that regulates both financial institutions and public traded firms, the commission appears to have lacked the concept and mechanism of conglomerate supervision," said Charles Yeh (葉銀華), professor of Finance at Fu Jen Catholic University.
For instance, Rebar Group controls a conglomerate of companies including The Chinese Bank, Union Insurance Co (
The commission should establish a group profile containing all data on affiliate companies to get a broader picture and thereby make it easier to detect possible misconduct and enact damage control measures in the early stage of a crisis, Yeh said.
Strengthening communication and cooperation among parallel agencies within the commission and with other agencies is necessary, he added.
Yeh proposed a mandatory disclosure by all affiliates, perhaps coming in the form of an organizational chart, to help investors see through companies that have complex cross-holdings or an unusual number of affiliates -- all factors which, as in the Rebar case, can facilitate embezzlement and other offenses.
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