His was one of the names immediately mentioned to take up the vacancy left by his predecessor Sean Chen (陳冲), who was promoted to vice premier in the middle of this month, although he was believed to be the second choice given his limited connections in the domestic financial sector.
Nonetheless, few were caught by surprise when Chen Yuh-chang (陳裕璋), former chairman of state-run First Financial Holding Co (第一金控), was appointed to head the Financial Supervisory Commission (FSC).
“Prior to the FSC, Chen Yuh-chang was not a household name in financial circles,” said Chu Hau-min (朱浩民), professor of money and banking at National Chengchi University.
But that weakness could be translated into an advantage for Chen Yuh-chang as he stakes his claim as the head of the nation’s top financial regulator, which oversees the financial sector’s health, and avoid conflicts of interest, Chu said.
“He has a clean track record in that regard [of cronyism],” said the professor, who is willing to give Chen Yuh-chang a honeymoon period of three months to see if the new regulator lives up to expectations.
THE MA CONNECTION
Before taking the top spot at First Financial, Chen Yuh-chang was a close aide to President Ma Ying-jeou (馬英九) when Ma was first elected Taipei mayor in 1998.
Chen Yuh-chang served as secretary general of the Taipei City Government until the last six month of Ma’s second four-year mayoral term when he was promoted to deputy mayor.
He was later appointed to chair EasyCard Corp (悠遊卡公司) in Taipei, which is 40 percent owned by the city government and its rapid transit arm, until 2008 when the president opened the door for Chen’s entry into the banking sector.
Such a long-standing political attachment to Ma has led some to believe this link was what secured Chen’s chairmanship.
“The [commission’s chairmanship] reshuffle means nothing except that an important post has been taken over by someone with close ties to Ma,” Democratic Progressive Party (DPP) Legislator Gao Jyh-peng (高志鵬) said.
“[For Chen Yuh-chang] to be a follower won’t be enough,” he said, in response to the pledges the newly appointed chairman made after being sworn into office that he would broadly follow his forerunner’s financial policies.
The DPP lawmaker said the 54-year-old Chen Yuh-chang should flex his muscles by hammering out his own financial policies, despite the fact the new chairman focused his business major on accounting during both his undergraduate and graduate studies at National Taiwan University.
KMT CONFIDENCE
Chinese Nationalist Party (KMT) Legislator Alex Fai (費鴻泰), however, said he was confident that Chen will do a good job.
“He’s just modestly playing a fool,” said Fai, a former city councilor.
Fai said Chen Yuh-chang was teased for being a “merciless and strict” official for Taipei City, someone who didn’t pull strings and was a man of integrity. Chen Yuh-chang was especially good at coordination, the lawmaker said.
Chen Yuh-chang is no stranger to the financial regulatory system.
After university, he worked as a researcher at the committee of the Executive Yuan’s Development Fund (開發基金) in 1982 and slowly climbed the administrative ladder to head the then-securities and exchange division under the Ministry of Finance — the forerunner of today’s Securities and Futures Bureau.
In 1996, he served as the director of the Cabinet’s fourth division where he was responsible for the coordination of finance-related government agencies, while doubling as a board director at the then-International Commercial Bank of China (中國國際商銀), later renamed Mega International Commercial Bank (兆豐商銀), the banking arm under Mega Financial Holding Co (兆豐金控).
EXPERIENCE QUESTIONED
Still, his lack of expertise and solid experience in the banking and insurance sectors has raised concerns as to whether he’ll be able to learn quickly enough and manage to stay on top of imminent changes.
Although he is only tasked with carrying out Ma’s policies, the power in Chen Yuh-chang’s hands would still be so great that every decision he makes could completely change the landscape of the nation’s banking, insurance and securities sectors, said Shen Chung-hua (沈中華), a professor of finance at National Taiwan University.
“In the face of a crucial turning point, the chairman should soon lead a group of experts to initiate feasibility studies, which may take two to five years to complete, on the consequences of inking an economic cooperation framework agreement with China,” Shen said.
Compared to the nation’s first and second rounds of earlier financial reforms, the yet-to-be-signed trade pact with China will have a far greater impact on the local economy, he said.
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