Taiwan is moving to loosen the tether on its banking system. But the process will be slow and careful.
''We believe in doing things gradually,'' says Robert Chien, deputy governor of the Central Bank. ''We are trying to relax controls over a long period, and this process will continue.''
One important domestic move has been for the Central Bank to give up its role as sole arbiter of the exchange rate.
Mr. Chien says: ''We set the ceiling, but we let the banks decide the actual rate based on market conditions. When they think it's time for a change, they tell us, and we almost automatically approve.''
There is widespread agreement that the present stage of national development requires a more sophisticated, flexible banking structure -- especially the development of more channels through which the local business community can gain better access to investment capital.
The Central Bank, for instance, favors a wider range of high and low interest rates to cater to various types of clients -- everyone from the chairman of a giant corporation to the operator of a back-street workshop.
''Yes, everyone admits our capital market is underdeveloped,'' Finance Minister Hsu Li-teh concedes. ''And it's very hard to achieve more sophistication.
''You cannot really buy that sort of technology overseas. You have to develop your own, which means creating a large cadre of experts in banking, legal affairs, accountancy, etc. And at present we don't have enough trained people to allow us to do what we would like to do.''
There are large holes in banking services that are now being offered, agrees Ronald Ho, president of the International Commercial Bank of China. His bank is the most active among local institutions in the automation and expansion of services as well as in moving overseas to participate in foreign syndicate loans.
He cites the lack of merchant and investment banks, as well as the currently weak capital market. ''We are encouraging moves to strengthen this aspect so that firms will increasingly go into the equity market for funds and not just rely on banks,'' he says.