One of the most important public policy issues regarding commercial banks is their ownership by companies primarily engaged in non-financial activities. As a way to protect against the potential risk of mixing banking and commerce, most leading countries are adopting some regulatory limits to bank equities that non-financial firms can own with voting rights. In Korea, non-financial firms are prohibited from owning more than a four percent stake of banks with voting rights. However, given the dominant presence of foreign capital in the banking sector in Korea and the struggle to find domestic capital to help privatize government-owned financial institutions and intensify the competitiveness of the Korean financial industry, the controversy over whether restrictions are too strict to improve the mobility of ample liquidity accumulated in the industrial sector has resurfaced recently.
The debates have been heated up as the Financial Services Commission announced a policy to progressively deregulate the strict rules in three prudent steps: to allow private equity funds and pension funds to own banks in the first stage, to raise the bank ownership limit with voting rights to as high as ten percent in the second stage, and to shift the focus of regulation from ex ante ownership restrictions to ex post supervision with an intensified dynamic fit and proper test of prior screening for qualified capital.
In this policy seminar, various participants discuss the costs and benefits of ownership deregulation and recommend the best ownership model for commercial banks in Korea.
은행 소유규제 합리화 방안(Discussions in search of the best ownership model for commercial banks in Korea)
|Series Title; No||정책조사보고서 / 2008-02|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||한국금융연구원; KDI 국제정책대학원|