Published : Jan. 16, 2014 - 20:15
The Korea Exchange building in Yeouido, Seoul. (Korea Exchange)
Regulators’ attempts to tighten their grip on mismanaged public organizations are driving state-run financial firms to try to justify their continued existence.
In a bid to avoid being merged into other agencies, or even abolished, some state-run financial organizations have been striving to promote their unique aspects to stand out from the rest.
Debt clearing house Korea Asset Management Corp. stressed its competitiveness in small-loan financing, claiming that its role should be distinguished from that of the new small loan organization to be launched this year.
“KAMCO’s small-loan business is mostly about nonperforming loan disposal and is not the equivalent to the general concept of financing for low-income people,” said an official, dismissing the concerns that KAMCO’s role may be reduced in the future.
KAMCO president Hong Young-man, has said that the company would reinforce its corporate restructuring and overdue debt management activities, displaying his determination to defend KAMCO’s independence.
Korea Finance Corp., which is to be tmerged into the Korea Development Bank this year, underlined its contribution to the country’s long-term account balance.
“Our company contributed to the government’s implementation of a creative economy by establishing investment funds and thus supplying long-term capital,” said Lee Dong-choon, vice president of KoFC in his New Year’s message.
Lee is currently filling in for former president Chin Young-wook, who stepped down late last year amid a dispute over the government’s planned merger.
The merger is generally seen as the absorption of Korea Finance Corp. by KDB, and triggered strong resistance from KoFC last year.
The country’s main bourse, Korea Exchange, has been seeking privatization as a means to improve its competitiveness, but this plan is likely to falter due to the objections of the Financial Services Commission.
Last week, Korea Exchange chair Kim Kyung-soo repeated his argument that Korea’s stock market should be privatized to improve competitiveness.
The bourse was turned into a state-run body in 2009, under the administration of former President Lee Myung-bak, following the claims that, as a monopoly, its management should be directly monitored by the state.
Korea Exchange also pledged to reduce costs, extend trading hours and reduce its number of overseas branches.
But the FSC discouraged the plan.
“The FSC will see to it that the normalization of public financial organizations is implemented as planned,” FSC Chairman Shin Je-yoon was quoted as saying Monday.
Shin also pledged to hold one-on-one meetings with the heads of the organizations which have been ordered to improve their lax management ― the Korea Exchange, the Korea Securities Depository and financial IT solution provider Koscom.
The financial chief officer’s comments added weight to the speculation that the main bourse will continue to remain under governmental control, at least until it improves its management performance.
By Bae Hyun-jung
(tellme@heraldcorp.com)