The government-launched plan, which would merge three state-run lenders – Bank of Taiwan, Land Bank of Taiwan, and Export-Import Bank – would create a financial institution with an 18% share of the country’s banking market, assets of $160 billion and a combined market capitalization of more than $3 billion.
But so what? As critics point out, that would just create a much larger institution, with the same inefficiencies in place, and lacking any sort of impetus to reduce staffing levels.
What the country needs to do, as anyone outside Taiwan’s powerful unions recognizes, is to create a small clutch of powerful, privately run lenders capable of extending their reach beyond the tiny, overbanked island.
That hasn’t happened, and is unlikely to happen. Over the past several years, a few, relatively minor mergers have taken place. Yuanta Core Pacific Securities this year absorbed Fuhwa...
