ISSN: 2056-3736 (Online Version) | 2056-3728 (Print Version)
Chih-Hsiung Chang, Wu-Hua Chang and Yi-Yu Shih
Correspondence: Chih-Hsiung Chang, simon5289@gmail.com
Department of Finance, I-Shou University
pdf (774.96 Kb) | doi: https://doi.org/10.47260/bae/923
Thanks to the deregulation of financial regulations since the 1990s, the domestic financial institutions had ever been in excessive amounts for a long time. In order to expand their business scope and market share, they often adopted a looser or simple review mechanism, which led to a decline in the asset quality of financial institutions and an upward trend in overdue loans. As a result, the credit card debt crisis caused by the information asymmetry and the derived serious social problems ensued . Under the pressure of public opinion, the financial authority was forced to promote the debt negotiation mechanism in 2005 and even led passing the Consumer Debt Clearance Regulations in 2007. This article analyzed the statistics of consumer finance related to public and private banks, trying to explain whether the problems related to information asymmetry was reduced and whether financial institution management was effective. The result revealed that the number of valid cards, revolving interest rates, and overdue ratios fell in tandem after the financial authority intervened in the market. Especially when the credit card debt crisis and the social problem were showed under control, it was proven that financial institution management is essential and effective to reduce problems related to information asymmetry in Taiwan.
Financial Institution Management, Credit Cards, Card Debt Crisis, Information Asymmetry, Adverse Selection, Moral Hazard.
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