TAIPEI (Reuters) - Taiwan's top financial regulator expects up to a dozen local banks to set up branches and offer banking services in the Chinese market next year, the Wall Street Journal reported on Tuesday.
The move signals a further warming of ties between the political rivals since the island's President Ma Ying-jeou took office in May and will allow Taiwanese financial firms to set a foothold in the massive and fast-growing Chinese market.
Sean Chen, chairman of Taiwan's Financial Supervisory Commission, told the newspaper that China and Taiwan expect to reach an agreement in the first half of 2009.
Taiwanese banking shares rose on Tuesday following the report.
Investors have been expecting the deal, which will come in the form of a memorandum of understanding (MOU) on cross-strait financial supervision, and see it finalizing soon.
"There would be a satisfactory result (on the MOU) when both sides hold talks in the first half of next year," Chen told legislators on Monday.
"Whether or not Taiwan banks will establish branches on the mainland would be on a case-by-case basis," he said in a parliament session.
Officials from the commission were not immediately available for comment.
A number of Taiwan banks already have representative offices in China, but they are not allowed to offer any banking services.
Taiwan's banking and insurance sub-index <.TFNI> climbed 4.6 percent at 0335 GMT, outperforming the broader market's <.TWII> 3.4 percent rise.
(Reporting by Faith Hung and Jeanny Kao; Editing by Lincoln Feast)
