This paper explores the financial supervisory reform in Taiwan and how it was as an outcome of both international and domestic level factors, including the influence of authoritarian legacy. In Taiwan’s story, the initiation of the financial supervisory reform was indeed influenced by the pressure of financial globalization; however, the pressure was not transited through an outside-in route. Rather, the state began the reform in the knowledge of the shocks that globalization might bring. The move represented the states determination to show that it was well-prepared to join the international financial community. Although the reform was initiated by political elites, the legislative process was led by the state bureaucracy. Since the financial industry has been under the control of the state for a long time, the state has always prevailed over the market. Therefore, for bureaucrats, there was no need to reform the supervisory system since the system itself was efficient, resulting in a lack of political momentum during the reform process. Consequently, the financial supervisor y reform was eventually passed due to electoral considerations. In appearance, a new single organization emerged out of the reform. However, little has changed in essence.