By Park Hyong-ki
Staff Reporter
The country's financial authority has always emphasized the importance of internationalizing the market and its regulatory system, while calling on securities companies and banks to strengthen their risk management and boost globalization.
This comes as the market is about to get fierce under deregulation on the financial market amid efforts to develop the financial industry as the nation's next growth engine.
The Capital Market Consolidation Act, which eliminates business safeguards between futures, asset management and securities companies, marks the first financial reform under the government's plan to create a global investment bank and develop Seoul as one of Asia's top three financial centers alongside Hong Kong and Singapore.
However, analysts say more efforts and reforms are needed should the country desire to become a financial hub of Northeast Asia. Under the plan by the former administration, the country is to foster asset management as its niche by 2010. The first task was facilitating regulatory system, and deregulating rules governing asset management operations and establishing the Korea Investment Corp., a sovereign wealth fund.
Analysts say the new administration should push forward financial deregulation and back the growth of financial firms to achieve sound outcomes.
``The country has been evaluated as slow in implementing its hub plans compared with its competitors due to a lack of viable results from policy execution,'' said Hong Ji-yeun, a research associate of the Korea Securities Research Institute (KSRI).
Exemplified in a recent survey by the City of London Corp., Seoul ranks among the poorest in the world as a financial center, far behind its peers such as Beijing, Shanghai and Tokyo.
Also, the Korea Institute for International Economic Policy said last year that Seoul lags far behind Shanghai in terms of growth potential as a financial hub.
Experts say to overcome this distressful ratings, banks, brokerages and insurance companies need to gain experience in operating overseas by actively making inroads into other markets, and competing freely without boundaries.
Although a majority of financial firms are advancing abroad nowadays as they say it is necessary in the age of rapid globalization amid increasing competition, only a few have succeeded overseas.
Citing a survey of 300 financial firms by the Korea Chamber of Commerce and Industry, only 17 percent responded that their overseas ventures are bearing fruit, while some 70 percent saying that going global is inevitable. Over 35 percent said they are reluctant to operate abroad mostly due to heavy domestic regulations, while the rest cited a lack of market information and human resources.
The KSRI said besides deregulation efforts, boosting human resources remains as one of the most challenging issues on the financial market. Hong said financial firms need to increase their human capital through education, and secure professionals with fluency in English communication.
The newly appointed chairman of the Financial Services Commission, Jun Kwang-woo, said he will put top priority on deregulation and encouraging the public to acknowledge the importance of finance.
phk@koreatimes.co.kr
