Dec. 3 – Taiwan and Japan have inked an MoU designed to increase the financial stability of both countries’ markets and promote investor safeguards in Taiwan and Japan.
The Memorandum of Understanding for the Mutual Co-operation in the Field of Financial Supervision, which was signed last week by Taiwan’s Association of East Asia Relations and Japan’s Interchange Association, will facilitate the “exchange of supervisory information on financial institution’s [operations]” and “will be mutually beneficial for ensuring soundness of the financial systems in Japan and Taiwan,” according to the MoU.
This exchange of financial information will take place between Japan’s Financial Services Agency and Taiwan’s Financial Supervisory Commission, the countries’ governmental organizations charged with overseeing the banking and securities industries.
Under the MoU, several avenues of financial cooperation will be available to these financial regulators, including:
- Mutual notification of material concerns regarding financial institutions;
- Joint-cooperation and notification regarding remedial actions taken against financial institutions;
- Supervisory visits between countries;
- Exchanging of views on common concerns related to financial supervision.
The ultimate goal of this agreement, according to the MoU, is to deepen “mutual understanding and co-operation” between the two countries’ financial regulators.
Taiwan has increasingly sought to establish such arrangements in an effort to emerge from under China’s diplomatic shadow.
Last month, Taiwan joined with Singapore to establish an economic partnership aimed at increasing trade between the two countries and signed several agreements with Japan on industrial cooperation and patent protection.
Taiwan’s newest MoU on financial cooperation with Japan is seen as a positive development for continued integration into the Asian economy.
“It moves a giant step forward toward a bilateral economic partnership arrangement or free trade agreement [in Asia]. It also lays a sound foundation for economic integration in the East Asian region,” said a statement released by Taiwan’s Foreign Ministry last week.
The current MoU on financial cooperation builds upon the 2011 investment agreement between Japan and Taiwan, which provides Taiwanese and Japanese investors with “most favored nation” status, thus allowing each country’s investors to operate under their partner’s domestic securities laws.
The new MoU will be effective immediately for the duration of one year and will be automatically renewed at the end of each period.
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