Abstract
ABSTRACT With the development of globalization and the estabilshment of regional common markets, financial institutions conducting different business has become a new trend in Taiwan. Besides problems arise due to the serious saturation of the banking market, local banks in Taiwan have encounter severe challenge and competition from foreign banks after Taiwan joined WTO. To speed up the reform of our highly saturated banking sector, the Legislative Yuan passed the M&A Act allowing the merger of same-type financial institutions in order to achieve economy of scale. Moreover, FHC Act was passed in the following year to permit the formation of cross-sectoral financial holding companies. The FHC Act not only facilitates horizontal consolidations, it also helps to enhance the management efficiency. Besides, the join together of the two acts bring the motivation for the financial institutions to establish Financial Holding Companies (FHC) in Taiwan. But whether the establishment of FHCs can really bring the above effects are yet to be observed. Based on the study of some reports and comparative analysis of case studies, the following suggestions are made for industrial banks to develop themselves into investment banks or FHC: 1、Analyze the market position and business niche . 2、Maintain the traditional banking businesses. 3、Establish a global business network. 4、Enhance the innovation of new financial products. 5、Develop strategies as follows: (1)Short-term goal: strengthen core business and develop the investment banking business. (2)Mid-term to Long-term goal: accumulate human resources and operation experience towards the investment banking and FHC in Taiwan.