Financial Institutions Are Dwindling

For the past five years, 312 financial institutions went out of business and 2,000 executives working at financial institutions lost their jobs.

The Financial Supervisory Service said on September 14 there were 1,395 financial institutions at the end of 2005, down by 312 or 18.3% from 1,707 at the end of 2000.

266 Credit Unions and 36 Federation of Savings Banks went out of business. That shows the restructuring disproportionately affected non-banking financial institutions.

In contrast, 11 more non-life insurers were added thanks to the emergence of on-line auto insurers selling insurance through the Internet. That also boosted the total number of insurers compared to five years ago.

The restructuring also reduced the total number of executives in the financial sector by 0.8%. There were 259,000 executives at the end of 2005, down by 2,000 from 261,000 at the end of 2000.

Life insurers, credit unions and securities firms heavily affected by the restructuring fired some of their executives but banks hired more staff members.

Credit card companies and other loan businesses hired more employees.

Meanwhile, assets of the domestic financial institutions increased 558 trillion won, or 48.2%, from 1,158 trillion won late 2000 to 1,716 trillion won at the end of 2005.

sanhkim@donga.com