Korea is second to none when it comes to importing global fads. Yet it is not because Koreans like to blindly imitate anything Western that they are reenacting the cross-Atlantic protests against casino capitalism in Seoul earlier than most other Asian capitals. It is because Korea’s financial sector is as greedy as their American and European counterparts.
Little wonder the local protesters’ slogan is ``Occupy Yeouido,” a Seoul district where financial powerhouses and regulators are headquartered, called the Manhattan of Korea.
Like their Western competitors, Korean banks and brokerage houses are prospering at the expense of their clients ― not along with them. The large commercial banks raised lending rates amid the prolonged economic slump, and securities firms imposed high commissions no matter how many individual investors go belly up in roller-coaster markets.
Just as the Wall Street mega banks escaped from the financial crisis they made with taxpayers’ money, Korean banks pulled out of the currency crisis with public funds ― and both groups have since been partying with hefty bonuses and dividends while many become jobless and homeless.
There are differences, too. Unlike Western banks that develop risky products and markets, the Korean banks are stuck at home resorting only to the stone-age financial techniques of capitalizing on the spread between deposit and lending rates. About 85 percent of their net profits come from this net income margin, and the rest from various commissions.
The financial service firms’ productivity is far lower than major industrial companies but their employees receive far larger salaries.
There is only one reason for this: they are working where the money gathers. In Korea, people call large banks and other financial service firms financial ``institutions,” reflecting the nation’s long tradition of regarding them as public organizations. People often compare the financial industry to blood circulating the human body. When most of the blood stays near the heart instead of flowing through capillaries and supplying oxygen to the remotest cell, the body cannot operate normally, and will eventually break down, beginning with the heart’s own stoppage.
Both U.S. President Barack Obama and Korean President Lee Myung-bak are surrounded ― or arrested ― by financial power. The difference is, while the former Wall Street fat cats have captured the White House, in Korea the former Ministry of Finance (MOF) bureaucrats, called ``the Mofia,” have monopolized the President’s ears and eyes.
This is why Korean demonstrators, different from their Wall Street counterparts, have an additional demand of the independence of the financial sector in addition to restoring public functions to the industry.
On Saturday, protesters will rally loudly against savings banks’ managers who spent clients’ money like their own private funds as well as commercial banks which slapped compound interest on student loans, and refused to chip in 5 billion won in combined total to create a lending facility for the poorest workers while earning 20 trillion won in net profit this year.
These are cries the entire Establishment ― politicians, bureaucrats and businesses ― should heed. And they are also the signs the public will no longer endure this unfair and unjust winner-take-all system.