ABSTRACT
This chapter addresses the issue regarding the recent liberalization and internationalization of financial and capital markets in Taiwan. It evaluates the importance, effects, and extent of recent liberalization and globalization of the banking and securities industries. The opportunities and pitfalls that lie ahead for a further integration with the international capital market are also analyzed. The order and speed of economic liberalization have received great attention in both academic and policy-making circles in recent years. In general, it is suggested in the literature that both stable prices and a balanced fiscal budget are essential preconditions for financial liberalization. The money market in Taiwan was officially established in 1976. During the period from November 1980 to September 1982, the official interest rates were adjusted as many as ten times to keep up with the movement of money market rates and that of interbank call rates.
