FSC Chairman Opposes “Easing of Separation of Financial and Industrial Capital”

Chairman Kim Yong-deok of the Financial Supervisory Commission (FSC) made it clear that he is opposed to the deregulation of the separation of financial and industrial capital on September 10.

This is in contrast with the opinion of the former chairman of FSC, Yun Jeung-hyeon, who argued for the utilization of industrial capital at an appropriate level for the development of the domestic financial industry.

When Mr. Yun, who used to be positive about the easing of the separation policy among government officials, resigned, the new chairman remarked on sticking to “the separation of financial and industrial capital.”

Chairman Kim said at a press conference on the same day, “As banks providing credit and industries tapping that credit have conflicting interests, the issue of banks having industrial capital must be carefully approached.”

He said, “It is said that due to the separation principle, banks, including SC First Bank, should not have been bought by domestic capital, but even without the regulation, it would have been difficult [for domestic capital] to buy [banks].”

He added, “Many banks have enough financial capacity, as shown by the recent resale of the Korea Exchange Bank. It is inappropriate to say that domestic capital cannot acquire banks due to Korea’s separation policy.”

legman@donga.com