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Kang Seung-woo

Korea Times Business Reporter

Kang Seung-woo is the Business Desk editor at The Korea Times. Prior to this position, he covered politics, national affairs, finance and sports.

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Companies

KIC loses $1 billion from Merrill Lynch investment

By Kang Seung-woo The Korea Investment Corp. (KIC) has been under fire for poor risk management, with its investment in Merrill Lynch halved in the wake of the global financial crisis, a lawmaker said Wednesday. During an audit by the National Assembly, Rep. Yoo Il-ho of the governing Grand National Party (GNP) said that KIC’s stake in Merrill Lynch was valued at $1.03 billion as of September, about half of the $2 billion it paid for the stake in January 2008. Hit by the global financial crisis, Merrill was sold to the Bank of America (BoA) in September, 2008. As of the end of September, BoA’s stock price fell to $13.11 per share from $27.52, the price at which KIC converted its Merrill preferred shares into common stocks on July 28, 2008. It agreed on the conversion to help normalize Merrill’s operation. The KIC has claimed that it retained the stake in the belief that the shares would rebound in the long term, given the intrinsic value of BoA. “Despite the KIC’s positive statement last year, the loss has snowballed since then,” Rep. Yoo said. “I am still wondering

Oct 21, 2010By Kang Seung-woo
Companies

Job market on recovery path

By Kang Seung-woo The nation’s job market continued on its recovery pace in September on the back of an economic rebound with nearly 250,000 new jobs created. But the youth employment rate still remained sluggish. Statistics Korea said Wednesday that the jobless rate was 3.4 percent last month, slightly up from the previous month’s tally of 3.3 percent, with the manufacturing and non-public sector increasing the number of jobs and offsetting losses in the temporary employment sector. The fourth-largest Asian economy put the unemployment rate under 4 percent for the sixth straight month since it sank from 4.1 percent in March to 3.8 percent in April. The rate hit a 10-year high of 5 percent in January. “Jobs in the public sector, which covers administrative support, national defense and welfare, decreased by 196,000 last month, but this was offset by 445,000 positions created by private businesses that required more workers to meet both local and overseas demands,” said Eun Sun-hyun, head of the statistical office’s social statistics division. The number of people who f

Oct 20, 2010By Kang Seung-woo
Companies

Bernanke, Trichet and co. coming to Gyeongju

By Kang Seung-woo Financial leaders from across the globe will gather in Korea this weekend to seek to find the middle ground on key issues, such as IMF reform and currency feuds, three weeks ahead of the G20 Seoul Summit slated for Nov. 11 and 12. Finance ministers and central bank governors from G20 member countries, as well as heads of international organizations, will attend the G20 Finance Ministers and Central Bank Governors Meeting scheduled for Oct. 22 and 23 in Gyeongju, North Gyeongsang Province. They are expected to try their best to narrow down their differences on key issues so that G20 leaders can bring about workable solutions at the November summit. Finance ministers include U.S. Treasury Secretary Timothy Geithner, U.K. Chancellor of the Exchequer George Osborne, Japanese Finance Minister Yoshihiko Noda, French Finance Minister Christine Lagarde, Chinese Finance Minister Xie Xuren and EU Economic and Monetary Affairs Commissioner Olli Rehn. In the pool of central bank governors are U.S. Federal Reserve Chairman Ben Bernanke, European Central Bank Presi

Oct 20, 2010By Kang Seung-woo
Companies

Regulators agree on liquidity coverage ratio

By Kang Seung-woo The Basel Committee on Banking Supervision (BCBS) took a step closer Tuesday to finalizing a reform program for the world’s banks after financial regulators and central bank governors agreed on a package announced last week. Following the committee’s day-long meeting held in Seoul, Nout Wellink, chairman of the BCBS, said that the committee agreed on key details of the liquidity coverage ratio (LCR) and new regulations for this will take effect from 2015 as scheduled. The new standard, which aims to raise the buffer of high-quality liquid assets so that a bank can withstand a period of stress, will be subject to an observation period and will include a review clause to address any unintended consequences. The new rules, known as Basel III, are scheduled to be phased in from 2013 with banks asked to hold higher reserves by January 1, 2015. "The finalization of the liquidity framework today should be seen as a landmark in the history of banking regulation," said Wellink, who is also president of the Netherlands' central bank. "What we did is completely ne

Oct 19, 2010By Kang Seung-woo
Companies

FSS to probe Shinhan Bank soon

By Kang Seung-woo The Financial Supervisory Service (FSS) is exerting more pressure on the besieged Shinhan Financial Group, as it plans to inspect the group’s banking unit next month. “The FSS will conduct a regular inspection of Shinhan Bank on Nov. 8 following Group Chairman Ra Eung-chan on Nov. 4,” an official of the FSS said Tuesday. The checkup of the third-largest bank is expected to last a little more than a month. The financial watchdog will investigate whether Ra has additional borrowed-name accounts with illegitimate funds and see if he violated other financial rules. The FSS will also see if Shinhan Bank CEO Lee Baek-soon managed Ra’s illegal accounts and was involved in more cases related with the chairman. The audit came as the financial services company made headlines from its implosions and the financial authorities are determined to punish any and all wrongdoings. Ra, who has headed the financial holding firm since 2001, allegedly wired 5 billion won to now-jailed businessman Park Yeon-cha through several bank accounts opened in other people’s na

Oct 19, 2010By Kang Seung-woo
Companies

What is FSB?

The Financial Stability Board (FSB) was established upon the agreement of the G20 leaders at the London Summit in April, 2009 as the successor to the Financial Stability Forum (FSF). Its membership was expanded from the Group of Seven countries to the Group of 20, which includes FSF members and 12 more nations, such as Korea and the BRIC countries (Brazil, Russia, India and China), making the FSB the premier international body in charge of financial regulations. Its membership includes national financial authorities and central banks; as well as international standard-setting bodies, such as the Basel Committee on Banking Supervision (BCBS), the International Organization of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS). As a fourth pillar of global economic governance along with the International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO), the FSB was mandated by the G20 leaders to promote global financial stability. The FSB is in charge of making policy recommendations after consulting with

Oct 19, 2010By Kang Seung-woo
Companies

Who is Chin Dong-soo?

Chin Dong-soo is the chairman of the Financial Services Commission (FSC) whose main purpose is supervising the financial services companies and financial markets to promote a sound credit system and ensure fair business practices. Chin, 61, who passed the higher civil service examination in 1975, started his professional career in the financial arena two years later at the Ministry of Finance. During his long spell in the sector, he has built his legacy as a career bureaucrat, assuming a variety of key posts including standing commissioner at the Securities and Futures Commission and the defunct Financial Supervisory Commission (FSC), director general of the Information Planning Office at the Postal Banking and Insurance Bureau and director of the Industrial Finance Division at the ministry. He made efforts to strengthen the transparency of the nation’s financial system. Chin contributed to introducing the Real-Name Financial Transaction System, serving as director of the Real-Name Financial Transaction System Task Force in 1989. In addition, during the Asian Financial

Oct 19, 2010By Kang Seung-woo
Companies

Who is Kim Jong-chang

By Kang Seung-woo Kim Jong-chang is the governor of the Financial Supervisory Service (FSS), whose primary functions are the examination and supervision of financial institutions. The 62-year-old began his professional career at the Ministry of Finance in 1970 after passing the state administration examination for civil servants that same year and spent more than two decades at the ministry, serving as assistant director, director and director general as well as the financial and economic counselor in the South Korean embassy to the United Kingdom. After completing a major in business administration at Seoul National University, the hard-working and ambitious Kim was named standing commissioner of the Securities and Futures Commission in 1998 and he also served as standing commissioner of the Financial Supervisory Commission in 1999 before becoming the deputy governor of the Financial Supervisory Service in 2000. Kim, a native of Yecheon, North Gyeongsang Province, took the reins of the Industrial Bank of Korea (IBK) in 2001 and under his leadership the state-run lender

Oct 18, 2010By Kang Seung-woo
Companies

Korea’s inflation to be highest among advanced countries

By Kang Seung-woo Korea’s consumer prices are expected to rise at the steepest pace among the word’s advanced countries from 2012 onwards, the International Monetary Fund (IMF) said Monday. In its global economic outlook report, the IMF forecast that the nation’s consumer prices will grow 3 percent in each of the four years from 2012 to 2015, the highest inflation rate among the 33 members of the Organization for Economic Cooperation and Development (OECD). Consumer prices of most developed countries are expected to climb between the mid-1 to 2 percent during the same period. The IMF expects Korea’s consumer prices to be the third highest this year and next, with forecasts of 3.1 percent and 3.4 percent, respectively. A rapid rise in consumer prices is likely to pose a threat to the economic recovery since growing inflation dampens consumer spending and facilities investment. The Washington-based organization said that Korea’s per capita gross domestic product (GDP) is likely to reach $20,164 this year, but will fall short of the government’s target of $30,000 in 2

Oct 18, 2010By Kang Seung-woo
Companies

What is BCBS?

By Kang Seung-woo The Basel Committee on Banking Supervision (BCBS) was established by the central bank governors of 10 countries in December 1974. It was broadened to include more members in 2009 ― Korea also became a member in March of that year. The BCBS formulates broad banking supervisory standards and guidelines, expecting member nations and others to implement them through their own national systems. The members are Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, Hong Kong, India, Indonesia, Italy, Japan, Luxembourg, Korea, Mexico, the Netherlands, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Switzerland-based organization is chaired by Nout Wellink, president of the Netherlands Central Bank who took the helm on July 1 2006, with Stefan Walter serving as secretary general. The committee meeting, scheduled for Tuesday in Seoul, will gather to finalize issues related to a regulatory reform package, as this will be its final meeting before reporting on such du

Oct 18, 2010By Kang Seung-woo
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