June 25, 2009

Taiwan is close to signing a long-awaited memorandum of understanding on cross-strait banking with China, Ming-Daw Chang, head of the island's banking bureau, said Thursday."The two sides already reached a very broad consensus on most of the MOU's terms," Mr. Chang told Dow Jones Newswires. He declined to specify a timetable, however, and a final deal could still be weeks away.

Taiwan and China expect to sign MOUs covering the banking, insurance and brokerage sectors soon. The MOUs are prerequisites to the two sides opening their markets to each other's financial institutions. More importantly, access to the Chinese market will allow Taiwanese banks to improve returns as the domestic market is overbanked.