ID :
26725
Sun, 10/26/2008 - 23:41
Auther :
Shortlink :
https://www.oananews.org//node/26725
The shortlink copeid
Business lobby calls for swift bank ownership deregulation
SEOUL, Oct. 26 (Yonhap) -- South Korea's largest business lobby said Sunday that bank ownership regulations should be swiftly eased to boost competitiveness in the financial sector.
Ownership deregulation could also help liquidity-starved local banks secure
funding amid the current financial turmoil, according to the Federation of Korean
Industries (FKI).
"South Korea's bank ownership regulations are too strict compared with other
countries," the lobby said in a report. "The regulations make it difficult for
firms to move towards a holding-company structure."
The United States is moving to ease bank ownership rules in a bid to help banks
secure funding easily, it argued. "Easing ownership regulations could help
resolve the current financial crisis," it said.
The government said earlier this month that it would allow industrial groups to
hold bigger stakes in banks in a move to beef up competitiveness in the banking
sector and sell state-run lenders more smoothly.
Current regulations forbid non-financial companies and industrial groups from
holding more than 4 percent of a given bank's shares with voting rights, while
financial firms are permitted to own up to 10 percent.
Under South Korean banking laws, a company is classified as an industrial group
if over 25 percent of its capital is invested in non-financial companies, or if
its assets in such companies top 2 trillion won (US$1.38 billion).
The Financial Services Commission (FSC), the nation's financial regulator, is
considering raising the cap on bank ownership by industrial groups to 10 percent,
and allowing pension funds, private equity funds (PEFs) and foreign banks to more
easily invest in local banks.
Under current regulations, a private buyout fund is classified as a
non-financial firm if more than 10 percent of the fund is invested by an
industrial group. The FSC said it will raise the ceiling to 30 percent.
The government is also working to find investors for stakes in three state-run
financial institutions -- Korea Development (KDB), Woori Finance Holdings Co. and
the Industrial Bank of Korea (IBK).
South Korea plans to start reducing its 100 percent stake in KDB next year and
fully privatize the lender by 2012 through share and private sales. KDB was
established in 1954 to provide financing for local firms.
sam@yna.co.kr
(END)
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Ownership deregulation could also help liquidity-starved local banks secure
funding amid the current financial turmoil, according to the Federation of Korean
Industries (FKI).
"South Korea's bank ownership regulations are too strict compared with other
countries," the lobby said in a report. "The regulations make it difficult for
firms to move towards a holding-company structure."
The United States is moving to ease bank ownership rules in a bid to help banks
secure funding easily, it argued. "Easing ownership regulations could help
resolve the current financial crisis," it said.
The government said earlier this month that it would allow industrial groups to
hold bigger stakes in banks in a move to beef up competitiveness in the banking
sector and sell state-run lenders more smoothly.
Current regulations forbid non-financial companies and industrial groups from
holding more than 4 percent of a given bank's shares with voting rights, while
financial firms are permitted to own up to 10 percent.
Under South Korean banking laws, a company is classified as an industrial group
if over 25 percent of its capital is invested in non-financial companies, or if
its assets in such companies top 2 trillion won (US$1.38 billion).
The Financial Services Commission (FSC), the nation's financial regulator, is
considering raising the cap on bank ownership by industrial groups to 10 percent,
and allowing pension funds, private equity funds (PEFs) and foreign banks to more
easily invest in local banks.
Under current regulations, a private buyout fund is classified as a
non-financial firm if more than 10 percent of the fund is invested by an
industrial group. The FSC said it will raise the ceiling to 30 percent.
The government is also working to find investors for stakes in three state-run
financial institutions -- Korea Development (KDB), Woori Finance Holdings Co. and
the Industrial Bank of Korea (IBK).
South Korea plans to start reducing its 100 percent stake in KDB next year and
fully privatize the lender by 2012 through share and private sales. KDB was
established in 1954 to provide financing for local firms.
sam@yna.co.kr
(END)
Download this as a file
