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The ownership and governance structure of Korean financial industry and its influences on the Korean non-bank financial companies

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Frame of Image conomic growth backed by intensive government support. By 2013, a total 13 FHC were set up in Korea since the scheme was introduced. The increase in the number accelerated since the 2008 global financial crisis. Before the crisis, the number of subsidiaries owned by FHC was less than 80, then the number jumped to 316 as the end of 2013, accounting for a quarter of the entire financial industry. Total assets of FHC used to hover around 20% of the total financial industry in the pre-crisis period, but the ratio climbed up to 37.2% at the end of 2013 following the expansion of major subsidiaries. Currently, among 13 Korean FHCs, 11 are bank holding companies whose major subsidiary is a bank. The problem is that their bias towards banking business has grown out of proportion that as of 2012, over 80% of total assets of the top 10 bank holding companies were held by their bank subsidiaries. Similarly, banks came to represent more than 90% of net profit of the entire holding companies. Accordingly, relatively less attention and resources have been given to non-bank financial subsidiaries of bank holding companies. Under this circumstances, Korean conglomerates (“chaebol”) came to be a
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dominant market player in non-bank financial industry. Until 2010, there used to be around a hundred financial companies owned by the so-called chaebols. Then it began to escalate sharply to reach 137 by the end of 2013 (excluding those owned by FHCs). By asset, non-bank financial firms owned by ch


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Title The ownership and governance structure of Korean financial industry and its influences on the Korean non-bank financial companies
Similar Titles
Material Type Articles
Author(English)

Lee, Si-Yeon

Publisher

[Seoul]:Korea Institute of Finance

Date 2014-10
Journal Title; Vol./Issue Korean Economic and Financial Review:
Pages 3
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Financial Policy
Economy < Economic System
Holding Korea Institute of Finance