Taiwan, China Agree on Bank Deal: FT
Taiwan and China have reached an initial agreement to let Taiwan banks use their Hong Kong subsidiaries to invest in mainland lenders, the Financial Times reported on Friday, citing unidentified sources.
The report comes after Hu Sheng-cheng, chairman of Taiwan's financial regulator, the Financial Supervisory Commission (FSC), said recently that the changes were in the final stage of confirmation and could be announced "very soon".
A senior official in Taipei said Beijing had agreed informally to the model, and that Taipei had sent a formal letter to Beijing to confirm it accepts the deal, the newspaper said.
FSC officials could not be reached immediately for comment.
Fubon Financial is widely expected to be the first Taiwan bank to be allowed to buy a stake of a Chinese bank, which local media have widely reported as Xiamen City Commercial Bank, via its Hong Kong subsidiary Fubon Bank (Hong Kong.
The HKMA, Hong Kong's central bank, will act as an intermediary for supervisory information, according to the FT report.
Taiwan banks have struggled with a saturated home market and are slowly recovering from a consumer credit crisis that sent many of them into the red in 2007.
Taiwan and Beijing, which sees the island as part of its territory and has threatened to attack by force if necessary, do not allow their banks to invest in each other.
Up until now Taiwan banks have been able to get limited access to China via Hong Kong. Mega Financial, SinoPac Financial and many other financial companies have branches in Hong Kong.