Finance Ministry’s bill may spell conflict of interest, researcher says
An expert at one of Korea’s leading economic research firms said conflict of interest could result from a Finance Ministry plan to allow large conglomerates to open investment banks and offer other public financial services. The Finance Ministry in March unveiled its intent to draft the bill, which it believed would speed the establishment of more investment banks in South Korea. The bill, if enacted, would allow firms currently outside of the financial service market to run everything from banks to securities and futures firms, as well as insurance and asset management firms."Though there are many errors and problems [with their proposal], the ministry continues to push ahead with the act," Lee Dong-gull, a researcher at the Korea Institute of Finance, said in a report. He added that the act seems to have been designed with the "hidden intent" to benefit "a certain business group or industry." Considering the market consolidation act deals largely with securities firms, Kim is likely referring to Samsung Group, which operates Samsung Securities Co. Lim Young-rok, director of the Finance Ministry's economic policy division, called Mr. Kim’s remarks "biased," saying that such large-scale revisions of the current laws would not be done for the benefit of a single company. Mr. Lim said that the bill is intended to enhance the competitiveness of the local financial sector and aid in the development of world-class investment banks. As for concerns raised by many in the economic sector over a possible conflict of interest if conglomerates are allowed to enter the financial service field, the ministry said it is preparing preventative countermeasures.
