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KCCI Chairman: Separation of Financial and Industrial Capital Should Be Eased for Economic Growth

KCCI Chairman: Separation of Financial and Industrial Capital Should Be Eased for Economic Growth

Posted October. 20, 2007 03:11,   

한국어

Sohn Kyung-shik, head of the Korea Chamber of Commerce and Industry, claimed on October 19, “The separation of financial and industrial capital should be relaxed, and a growth-oriented policy should be implemented.”

The separation of financial and industrial capital is a policy that restricts industrial capital, including that of conglomerates, from being invested in a bank for ownership. It is becoming the hot potato of the upcoming presidential elections.

Sohn attended a lecture with the theme: “The response of Korea and its businesses in an open economy” hosted by the alumni of Yonsei Graduate School of Business in the Westin Chosun Hotel, Seoul. He said in the lecture, “The separation of financial and industrial capital, the Fair Trade Commission’s special oversight on certain conglomerates, and the ceiling on domestic companies’ shareholdings should be eased. Moreover, Korean companies need a mechanism to use against hostile mergers.”

He added, “The economy flourishes when there are fewer regulations. Korea needs to assess the pros and cons of the restrictions and improve its current system. Korea is stuck between China and Japan. We need to weigh growth over redistribution.”

Meanwhile, the Bank of Korea showed a negative response to the economic circle’s call for deregulation of the separation of financial and industrial capitals.

Lee Seong-tae, the governor of the Bank of Korea (BOK), attended the National Assembly’s inspection of the administration on October 19. He said, “We need a prudent approach in deciding whether conglomerates should own banks or not. The BOK has a conservative attitude toward this matter.”

He added, “International examples show that there are countries with and without similar regulations. However, it is hard to see industry capital owning a bank, even in the latter case.”



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