South Korea Scraps Plan to Restrict Nationality of Bank Executives


By Kim Jae-kyoung
Staff Reporter

Finance-Economy Minister Han Duck-soo on Wednesday made it clear that the government will not adopt regulations concerning the makeup of boardrooms at local banks.

``South Korea has no such regulations and has no intention to implement them in the future,’’ Han said in a keynote speech at an international conference hosted by Euromoney, a U.K.-based capital markets magazine.

The Financial Supervisory Commission (FSC) had pushed for a plan to restrict the number of foreign directors at Korean banks to less than half of the total board members, but the attempt was blocked by the finance ministry.

Regarding the recently-revised ``5-percent rule,’’ Han said that the new disclosure rule was designed to make investment more transparent, regardless of where the capital is from.

``The new rule is not intended to discriminate against foreign investors and I believe that the revised rule is in line with global standards,’’ he said.

The rule requires investors with more than 5 percent in companies to reveal any intention to influence management.

Han’s remarks came as part of efforts to calm down growing concerns among foreign investors over the government’s latest policies against foreign capital.

The concerns have been mounting further after tax authorities conducted a broad tax audit against foreign private equity funds.

The top economic policymaker stressed that the government will do its best to improve the environment for foreign investors by easing regulations.

``To create an even better investment climate, the government will upgrade its financial and economic systems and create a better living environment by improving education and working conditions,’’ Han said.

``Keeping pace with the trend of globalization of financial markets, the government will continue to attract foreign direct investment and use it as a resource to develop the economy,’’ he added.

He pointed out that the government has identified 151 tasks necessary to provide a better business and living environment for foreigners, and are currently implementing them one after another.

He added that to speed up the nation’s financial hub vision, the government is accelerating the establishment of the Korea Investment Corp. (KIC), which will manage part of foreign exchange reserves exceeding $200 billion.

Han, who is also deputy prime minister, stressed the need for finding a financial sector as a new growth engine to achieve $20,000 in per capita national income.

``The financial sector’s improvement is essential for Korea to join the ranks of advanced economies,’’ he said. ``It will further drive the growth of our economy effectively by allocating resources and facilitating the flow of capital.’’

kjk@koreatimes.co.kr