Grand National Party presidential candidate Lee Myung-bak clashed with his United New Democratic Party rival Chung Dong-young over easing restrictions in the financial sector. Lee wants to ease the current ban on non-banking companies expanding into the banking sector, but Chung supports the ban.
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Grand National Party presidential candidate Lee Myung-bak shakes hands with his rival Chung Dong-young of the United New Democratic Party at the World Knowledge Forum at the Sheraton Walkerhill Grande Hotel in Seoul on Thursday.
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In a keynote speech at the World Knowledge Forum hosted by the business daily Maeil Business Newspaper on Thursday, Lee spoke out against Korea¡¯s strict ban on non-banking companies making inroads into the financial sector, which he said was harsh by global standards. He said the nation ¡°doesn¡¯t need to block non-banking capital from flowing into banking.¡± Instead, he said, it should devise ways to strengthen government supervision of industrial capital invested in the banking sector. ¡°Many countries including the EU don¡¯t ban non-banking companies from entering the banking sector in principle,¡± he said, proposing that the government consider gradually easing the ban over the next 10 years.
But Chung said global financial powerhouses like the U.S. and Britain do have the same ban, and easing it could be seen as a measure designed to benefit ¡°a certain conglomerate¡± and the ban should therefore remain intact. ¡°When conglomerates took over secondary financial institutions and turned them into private coffers, it led to the 1997 financial crisis a mere 10 years ago. Korea should not go back to applying the law of the survival of the fittest to the financial sector.¡± He said the country should instead boost ¡°healthy competition with proper checks and balances¡± to become a financial leader. The Banking Act bans companies whose primary business is not in banking from acquiring more than a 4 percent stake with voting rights in an bank.
(englishnews@chosun.com )
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