To deal with the global financial crisis, the British government was the first to come up with the plan to partially nationalize commercial banks. This is called the “Brown model” after Prime Minister Gordon Brown. Since Monday, the U.K. has injected 37 billion pounds ($63 billion) in public money into three major banks -- Royal Bank of Scotland, Lloyds TSB and HBOS. The 15 countries that use the euro have adopted the British model of partially nationalizing their banks and offering government guarantees for loans extended between banks.

The government’s acquisition of bank shares is an emergency measure aimed at reviving their loan capabilities. Most major banks in the U.S. and Europe are tied to subprime U.S. mortgage loans and have seen billions of dollars in losses. If they are to meet capital adequacy ratios set by the Bank for International Settlements, they need to cut their outstanding loans 10-fold. If that happens, businesses will be dealt a heavy blow, and the real economy will grind to a halt.

In order to avoid such a scenario, banks must issue new shares and boost their capital. But in a situation where banks do not trust each other and are avoiding extending loans to other banks, capital injection is almost impossible. That is why the government has stepped up as investor. Injecting public money into banks will have a quicker and concrete effect than acquiring insolvent debt.

But the increased usage of the Brown model does not signify the dawning of an era of bank nationalization, reversing the global trend of privatizing banks that began in the 1980s. Brown said the acquisition of bank shares is a “temporary” measure and stresses that the British government intends to sell all of its stakes at an “appropriate” time. He added the move involves the acquisition of shares without voting rights, so the British government will not be meddling in daily management decisions.

Due to the impact of the financial crisis, the chances have become greater that the privatization of Korean banks with stakes held by the government will be delayed. That is because it has become difficult to sell the government’s stakes in those banks at the right price. There are now calls by some people for the government to reconsider. But as long as Korea’s financial industry remains encumbered by a government-led environment, plans to improve their quality, efficiency and productivity will remain a distant dream. Despite what they say publicly, those who support the idea of reconsidering bank privatization altogether are actually unable to shake off their dependence on government-led financial policymaking. If the government is to deal with this chaos, it needs to clarify that it is committed to privatization, while unveiling its plans to revamp its financial supervisory role, which has emerged as a new task after the global financial crisis.