A Study on Legal Structure of the Financial Safety Net in Taiwan

• Main Authors: Bo-Tsang Liau, 廖柏蒼
• Other Authors: Yi-Hong Hsieh
• Format: Others
• Language: zh-TW
• Published: 2002
• Online Access: http://ndltd.ncl.edu.tw/handle/25096318835876444645

碩士 === 國立中央大學 === 產業經濟研究所 === 90 === Abstract “Financial Safety Net” is a system that financially supported by government in financial crisis process mechanism. Due to the contagion effect specialized in financial industry, a few bank failures might lead to financial crisis, a run on a bank, and even a massive banking panic. Further more, financial crisis would affect the whole country’s economical environment and the operation of financial system. Therefore, the government must intervene actively to reduce the harm from bank failure to the whole financial system. The financial safety system, which is formed by government’s funds, sets up an invisible “Safety Net” to lessen the impact on the whole financial environment and the depositors’ confidence caused by the managerial failure of the bank, and to offer a wonderful view that maintains financial stability and insures the depositors’ rights. Although the way the government fund may differ, the model of government intervening the marketing mechanism is essentially the same. The main object of this thesis is to re-examine the legislative purpose for the government to set up the “Financial Safety Net”. To analyze the legal structure of Taiwan’s financial safety net, the study compare some foreign cases to specify how and what different legal mechanisms do in handling financial crisis. To comment on the merits and demerits of Taiwan’s financial safety net in its legal structure, and the influence of financial order and depositors’ rights from the financial safety net. At last, the study further discusses the live or die of “Financial Safety Net”, and hope to bring forth some specific suggestions to financial and legislative authorities. Re-examining through the application of “Institution Changing Theory” and “Law Economic Analysis”, the study concludes that the financial authority should break the myth of “Financial Safety Net”, encourage the disclosure in market information, and establish the diversifying financial market, instead of blindly rescuing managerially failed banks. In addition, the thesis proposes four law-amending drafts to re-organize Taiwan’s financial environment, and to attain the goal of financial stability and financial safety. First, totally transferring Central Deposit Insurance Company to a private organization. Second, establishing the self-regulating organization in financial industry. Third, strictly limiting the condition of the governmental financial support. And fourth, re-building the function of marketing mechanism in financial industry.