`Deregulation and Privatization to Continue`

Financial Services Commission Chairman Jun Kwang-woo said yesterday that financial deregulation and privatization of certain state-run enterprises will continue despite the U.S.-triggered global financial crisis.

His comments are seen as a de facto rejection of requests from political circles to reconsider financial deregulation and privatization in the fall of the Wall Street shock.

In a breakfast lecture with financial and management experts hosted by the Korea Institute of Finance in Seoul, Jun said, “The commission will expand competition and autonomy within the financial industry through deregulation, and accelerate sectorial reshaping through the privatization of Korea Development Bank, which will reduce state intervention in the industry.”

“Twenty-one financial reform measures will be submitted to the National Assembly as scheduled. Our policy direction is to strengthen supervision on the soundness of financial companies and risks in the financial system while slashing regulations.”

On Saturday, President Lee Myung-bak urged proactive measures and government cooperation with the ruling party for prompt approval of deregulation bills, such as one on separation of financial and industrial capital.

On the global financial crisis, Jun said, “The crisis requires a renewed discussion of the financial system, but it would be an exaggeration to take it as the end of neo-liberalism or financial capitalism.”

“When you get into a car accident, you cannot prematurely blame it on engine flaws. There are other things to consider such as driver oversight (moral hazard of managers), problems with traffic lights (inadequate supervision), and the failure of police to stop speeding (supervisory institutions).”

sanjuck@donga.com