Taiwan, looking to encourage consolidation in its crowded financial sector, may significantly increasing the capital requirements that institutions must meet if they want to transform into financial holding companies.
The government is also considering lifting a suspension on financial institutions opening new bank branches, the Financial Supervisory Commission said late on July 04.
"The market has a need and, with the aim of encouraging reasonable competition and consolidation, we must consider reaching a certain standard," said Susan Chang, vice chairwoman at the financial regulator.
Taiwan currently has 14 financial holding companies and 44 banks servicing a population of about 23 million people.
Chang said the proposals, to be discussed this month, would require a financial institution to have a capitalisation of at least T$50 billion ($1.5 billion) and T$700 billion in assets.
That is up from the current requirement of T$20 billion capitalisation and T$300 billion in assets. The licensing of new bank branches was being considered, but only 10 branches a year would be permitted for each institution.
"To completely restrict the establishment of new branches is not in line with the spirit of a free market, so now after four years, it is now time for a review," Chang said.