Taiwan - Services

FINANCIAL SERVICES. As in the past, Taiwan's banking system is dominated by state-run institutions. Despite pressure from foreign investors, the financial sector has not been liberalized and remains under government control. Consequently, the financial services sector is underdeveloped. In 1995, the combined factors of the Mexican peso crisis, the flight of foreign capital from Taiwan, and the collapse of several savings institutions brought even more restrictive government controls, the severity of which caused an increase in black market activities. In 1991, the Bureau of Investigation launched a campaign against unlicensed investment houses and underground futures brokers that resulted in prosecutions of certain companies charged with stock manipulation. Despite such moves, the sector continued to draw criticism for its perceived dubious and risky practices.

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