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Despite the massive failure of investment banks in the U.S., Cheong Wa Dae on Tuesday said it will continue with plans to foster an investment bank by privatizing Korea Development Bank.
Even though five largest American investment banks with the exception of Goldman Sachs are in a difficult situation, ¡°we can't give up efforts to foster an investment bank that could match them,¡± a Cheong Wa Dae official said. ¡°Competent investment banks and the development of the capital market are two sides of a coin, so we can't give it up."
He said the original plan was to merge the KDB's investment division with Daewoo Securities to create an investment bank under the KDB holding company's supervision. ¡°But we don¡¯t insist on that. The U.S. financial crisis doesn¡¯t mean an investment bank based on a securities firm can be successful."
Turning to criticism of KDB's bid to buy Lehman Brothers from some politicians, he said, "Bank of America and Britain's Barclays have tried to take over Merrill Lynch and Lehman Brothers. Accusing KDB of risky activities overseas is like telling us, 'Don't go near the water or swim in it.¡±
He said the government will ease financial restrictions in such a way as to ban financial institutions from some activities but permit them to do everything else. ¡°This is not the same as intensifying the risk management of financial institutions,¡± he added.
(englishnews@chosun.com )
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