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4
Privatization of KDB
Supervision behavior improvement (Implicit
regulation)
Easing of bank ownership
Improving of non-banking holding company system
‘New Start 2008’(Plans to help low-income people )
Online One Stop system set up
Plans are currently under implementation according to
schedule after the announcement
Commence services on July 1st
Prepared improvement measures and some measures are now being implemented.
Have a final report at the next meeting
•Financial regulatory reform(A thorough study on
all regulations)
Complete the study and make a financial announcement in
July
6
(Principle one)Heightening of competitiveness through market competitionEasier entry
and liquidation of a company
Create new industry and new market
(Principle two)Striking balance between financial innovation and market stability
(Principle three)Aligning financial regulations with global standardsBalancing
between financial innovation and market stability with adequate regulation
Strengthening of supervision capacity
Principle-based regulation
Negative regulation
8
`Private sector-led examination of
regulations whether certain regulations need
to stay in effect (421 major regulations)
Lessening or abolishing 122 regulations among 421 regulations(29.0%)
3.26~5.7
4.22~7
Present
Status reports on the study of all financial
regulations and deregulation
Deregulation by sector
122
Total
41
13
15
42
11Entry/ownership
Corporate governanceBusiness
Scope
Products/sales
Asset
Management
Study on all regulations by the FSC(About 1,300 cases) National competitiveness strengthening committee (477 cases)
10
15,000Compani
es
PresentPresent
Points at issue
Points at issueApplication since
1998(The number of companies on the list more than doubled)
Applicable only to listed
companies in the U.S. and Japan
List of companies
for external
audit(Listed/unlisted
companies with more than $7 billion of assets)
Mandatory Internal
accounting control system(Listed/unlisted
companies with assets more than $7 billion)
ImprovementsImprovements
18,074 개
3,600Compani
es 7 bil won
10 bil won 3,600Companie
sAround a $50
billion cut
18,074 개
7 bil won
10 bil won
15,000Companies
Around a $150 billion cut
11
자산운용사의 자산운용사의 계열회사 계열회사 주식취득주식취득
동일 대기업집단동일 대기업집단소속 금융회사의소속 금융회사의PEF PEF 출자한도출자한도
자산운용사의 자산운용사의 계열회사 계열회사 주식취득주식취득
동일 대기업집단동일 대기업집단소속 금융회사의소속 금융회사의PEF PEF 출자한도출자한도
Consolidated financial
statementsand combined
financial statements
Uniform
requirements for financial
soundness of financial
companies’ large shareholders
12
Scope of asset management companies for standing audit
: More than 1 trillion won of working assets 3 trillion won
Improvements and expected resultsImprovements and expected results
InclusionInclusion
9 9 CompaniesCompanies
13 Companies13 Companies
ExclusioExclusionn
22 22 CompaniesCompanies
Around a 300 million won cut for each company (About 6% level of operating profit at the end of
2007 for those 9 companies )
Diverse investor protection measures are in place even though standing audit system is abolished.
13
Enhanced customer convenience
Customer protection and market stability
Allow the issuance of card in partnership between securities companies and credit card companies
Require customer’s assent for the use of personal credit information
Ban on the transfer of customer information obtained by foreign bank branches in the nation
Increase the number of ways to raise difficulties regarding the usage of cards: In writing By telephone, internet
Ban on the immediate issuance and sale of credit card on the street
Shift to negative system in terms of the scope of card payment
Increased interest of financial
customers and
enhanced market stability
****** 증권 증권 CMACMA
*This was suggested to be deregulated but was decided to stay in effect.
14
Combined service center for
civil affairs regarding financial
services※ FSC + FSS
Combined service center for
civil affairs regarding financial
services※ FSC + FSS
e – Financial services system ※ Licensing, authorization, registration,
authoritative interpretation, civil
petitions regarding financial services,
information disclosure
e – Financial services system ※ Licensing, authorization, registration,
authoritative interpretation, civil
petitions regarding financial services,
information disclosure
Online
Services exclusively for licensing,
authorization, authoritative interpretation
Services exclusively for licensing,
authorization, authoritative interpretation
RM(Helper for licensing and authorization process)
One-stop service center
Offline
3. Online·One-stop service system
29
Operate Ombusman system
Administrative guidance and
sunset clause
Prepare legal basis for
prohibiting implicit
regulations
Operate Ombusman system
Administrative guidance and
sunset clause
Prepare legal basis for
prohibiting implicit
regulations
Prepare measures to ease implicit regulations
Put OnlineOne Stop
Service into service
Activate No-action letter
system
Put OnlineOne Stop
Service into service
Activate No-action letter
system
Upgrade transparency
Sanctions against violation of
regulations
Improve system
Reinforce risk management
and management consulting
Sanctions against violation of
regulations
Improve system
Reinforce risk management
and management consulting
Improve sanction-oriented examination practice
Strengthen self-regulation
system in each industry
Grant incentives to
excellent employees
Strengthen self-regulation
system in each industry
Grant incentives to
excellent employees
Delegate authority and provide incentives
30
Satisfaction levelSatisfaction level Enhancing the competitiveness of the Korean financial industryEnhancing the competitiveness of the Korean financial industry
Very satisfact
ory34%
Satisfactory,
37%
Average17%
Unsatisfactory11%
Market participants have high expectations on the government’s
regulatory reform
40 위
IMD 금융경쟁력 순위IMD 금융경쟁력 순위
With successful regulatory reform, the government aims to rank within the top 20 during the presidential term and within the
top 10 within 10 years
38 위 37 위31 위
40 위
20 위 10 위
40 위 38 위 37 위31 위
40 위
20 위
10 위
IMD 금융경쟁력 순위IMD 금융경쟁력 순위
*FSS(‘08.6)
32
Entry policies for each financial industries in the futureEntry policies for each financial industries in the future
은행Bank
보험Insuran
ce
Securities and asset
management
Easing of bank ownership
(Align regulations with global
standaards)
Diversify authorization requirements
(prepare groundwork for
creation of internet banking)Expand
business scope
(Use add-on style)
Allow new entrants
without limit
Loosen regulations
on entry
Allow new entrants without
limit(Especially monoline insurance company)
34
Credit card
Installment financeCompanies
with new technoligies
Blue-chip and sound loan company
PresentPresent ReformReform 기대효과Expected results
기대효과Expected results
Specialized credit financial business
act
The loan company
act
Customer financingCustomer financing
•Ease sales regulation such as expanding the ratio of loan business
•Strengthen soundness supervision and customer protection
•Prevent damages from private loan
•Fortify supervision of financial supervisory authorities
Credit card
Increase the supply of financial services to ordinary citizens
Raise customers’ accessibility to high quality financial services
Prevent damages from private loan
- High interest rate
- Illegal collection
- Lack of supervisionFinalize the plan to introduce customer financing within this yearFinalize the plan to introduce customer financing within this year
Lease
35
Shopless internet bank: banks providing most of financial services
through electronic media of a few sales center or exclusively through online
Shopless internet bank: banks providing most of financial services
through electronic media of a few sales center or exclusively through online
Allow as much financial services as possible
to be able to choose diverse sales strategies
ShoplessInternet banks
Emergence of diverse financial products through shopless internet Banks Enhanced customers’ interest and heightened competition in the banking sector
Emergence of diverse financial products through shopless internet Banks Enhanced customers’ interest and heightened competition in the banking sector
Allow the amount of capital lower than the current banks capital of 50 billion won Provide customer services such as allowing
customers to raise difficulties not only through writing but also by telephone and email.
36
Bond insurer: a financial guarantor and a provider of specialized financial servicesBond insurer: a financial guarantor and a provider of specialized financial services
Revitalize the CB market through better corporate bond credit rating-> reduction in capital funding(corporate), diversification of investment products(investor)
Revitalize the CB market through better corporate bond credit rating-> reduction in capital funding(corporate), diversification of investment products(investor)
Bond insurer
Credit rating agency
Corporate bond
Bond insurance structure
Credit assessment
Gu
ara
nte
e
InvestorInvestment
Introduction plan(Ex)
Entry requirements: high credit rating(ex: international credit rating above AA
Scope of business: CB insurance, CDS(risk distribution)
Scope of guarantee: blue-chip corporate bonds
37
Merchant Cash Advance:
Extend loan based on the amount of credit card sales of small-scale enterprises
Merchant Cash Advance:
Extend loan based on the amount of credit card sales of small-scale enterprises
Insure certain sales activity of small scale business and secure the repayment of loanInsure certain sales activity of small scale business and secure the repayment of loan
Credit card
company
Bank account for credit card
charges
Small scale
businesses
Cre
dit c
ard
sale
s
Bank
Repayment of loan with part of monthly credit card payment
Loan based on the amount of credit card sales
38
• Graduate school of finance
• System of fostering financial experts
with field experiences(ex: NYIF, a
private provider of financial training
and education)
Improved organizations to nurture
financial professional
• Formation of communities(corporate,
academia and government) to grow
financial experts
• Development of core standard job for
the financial industry
• Introduction of ‘Government certificate
system’ for quality education course
Improved organizations to foster
financial experts
Taking care of lack of financial professions(Need about 1,400 experts
for the next five years) Maximize the job creation effect
through development of the financial industry
Taking care of lack of financial professions(Need about 1,400 experts
for the next five years) Maximize the job creation effect
through development of the financial industry
41
Privatization of KDB
Supervision behavior improvement
Easing of bank ownershipImprovement of non-
banking holding company system
‘New Start 2008’(Plans to help low-income people)
Online Onestop Service set up
Currently being implemented after the announcement
Commence services in July after completing the system
set upImprovement measures for supervision behavior and some are currently under
implementation
Have a final report at the next meeting
Financial regulatory reform(A thorough study
on all regulations)
Complete the study of all regulations and make a final
announcement in July
Improvement of regulations on sales
activity and behavior of financial companiesMeasures to strengthen supervision capacity
Prepare additional improvement measures and
report them at the nest meeting