By Park Hyong-ki
Staff Reporter
Sakong Il, the head of the presidential transition team's national competitiveness board, emphasized the need to benchmark London if the country's financial market desires to advance forward through deregulation.
Sakong briefed the team about his meeting with business and government officials at the World Economic Forum in Davos. His week-long overseas trip included Honolulu, Hawaii, London, the United Kingdom and Paris and France.
He said Korea should adopt a principle-based regulatory system such as that of London rather than continuing to supervise the financial market by the book or a rule-based regulatory system.
``We need to balance the two systems evenly,'' Sakong told reporters Tuesday, adding that the country should move to boost its monitoring system as a means to prevent financial fallouts or defaults.
He explained that through deregulation, London was able to emerge as the world's leading financial center.
In 1986, London implemented financial reforms aimed at eliminating the distinction between stockjobbers and stock brokers on the capital market, and tearing down business barriers between the securities and banking sectors to increase efficiency. This major overhaul created a market of reduced commission fees and free-competition, Sakong said.
He continued to say that it is imperative for Korea to do the same as it will boost the country's foreign direct investments and create a business-friendly environment.
Also, the official noted that deregulation will help the country overcome the ongoing financial woes stemming from the U.S. subprime meltdown.
He said the transition team is expected to announce additional deregulation plans for the development of the financial market next month.
Regarding the worldwide credit crisis, Sakong believes its effect on Korea is minimal. However, he stressed the need to internationalize its regulatory framework to adjust to the rapidly changing climate.