Taiwan’s chief financial regulator on Friday became one of the first Asian officials to step down because of the global financial crisis, quitting just four months after he took office.
Gorden Chen, chairman of the Financial Supervisory Commission, a super-regulatory body, tendered his resignation last week because he “did not have the public's full support and approval, and did not meet his own expectations” in tackling the recent turmoil, the government said in a statement. His resignation was approved by the prime minister on Friday.
While the impact of the financial crisis was thought to have played a big role in the September resignation of Japanese premier Yasuo Fukuda, Mr Chen was the first Asian official to directly cite his crisis management efforts as a reason for stepping down. His resignation also forms the first tacit admission, by president Ma Ying-jeou's administration, of shortcomings in how it dealt with the crisis.
Taiwanese banks had little direct exposure to troubled US financial institutions but the loss of confidence as a result of the crisis battered the stock market and at one point threatened a bank run. Taishin International Bank, the banking arm of the island's third-biggest financial group, last month had to deny rumours it was being nationalised after depositors withdrew almost $1bn within two weeks.
To prop up the local stock market, which had halved in value since May, Mr Chen instituted a total ban on short selling at the end of September, and later halved the limit by which any stock could fall in a day to 3.5 per cent. Both moves failed to halt the slide in share prices and instead was criticised by investors who saw it as heavy-handed government intervention.
A Taipei-based foreign bank executive told the Financial Times Mr Chen appeared to suffer from a disconnect with the global situation,. “He put on a poker face and was still taking about transforming Taiwan into a regional financial center even as the crisis raged on,” the banker said.
Mr Chen was unavailable for comment on Friday, but in an interview with the Financial Times last month, he laid out his vision of building Taiwan into an Asian financial centre. “This is not something Taiwan can do by itself, but why am I so confident? Because the new government's policy is one of mutual trust and benefit with mainland China,” he said, referring to the Ma administration’s policy to reverse the antagonistic cross-Strait policies of his predecessor.
Mr Chen will be succeeded by Sean Chen, chairman of SinoPac Financial who was formerly vice-finance minister and chairman of the Taiwan Stock Exchange