The Korea Herald

[Newsmaker] Top regulators have nothing to celebrate

　Financial Supervisory Service Gov. Choi Soo-hyun and Financial Services Commission Chairman Shin Je-yoon may consider themselves unfortunate, as they are burdened with the role of leading Korea’s financial industry at a difficult time. Shin and Choi would have celebrated their first inauguration anniversary amid much fanfare this week, if it were not a sluggish economic performance and the escalating pressure for their resignation.Instead of celebrations, the two chiefs have chosen to remain lo

March 20, 2014

[Newsmaker] Top regulators have nothing to celebrate

BOK’s debt hits W440 trillion-mark

The central bank’s debt level has risen to a new record high of more than 440 trillion won, while its net profit has fallen to the lowest in six years, data showed on Thursday.The debt grew 3.1 percent to 448.4 trillion won ($417 billion) in December 2013, compared with 435 trillion won from a year earlier, according to the Bank of Korea.The BOK data comes amid growing concerns about the country’s escalating public and household debts. The 2013 data also shows that the BOK’s debt had grown at a

March 20, 2014

Allegations still hanging over BOK chief nominee

Lawmakers failed to shed light on allegations made against Lee Ju-yeol, the nominee to head Korea’s central bank, during their confirmation hearing Wednesday.As a result, suspicions regarding the compulsory military exemption of his son remain. Aides of the Bank of Korea nominee have argued that his 32-year-old son, who is a medical doctor, was exempted from military service due to damage to a ligament in his leg that he sustained while playing basketball in his 20s. While the aides said Lee’s s

March 19, 2014

Allegations still hanging over BOK chief nominee

Bank chairmen to face huge wage cut for poor performance

Heads of major financial holding companies in South Korea will face a sharp wage cut starting this year as regulators enforce a performance-based pay system for the top executives, industry sources said Wednesday, a step partly answering to escalating criticism over their moral hazard.The top four financial holding companies -- KB Financial Group Inc., Shinhan Financial Group Co., Woori Finance Holdings Co. and Hana Financial Group Inc. -- have decided to cut the basic salary of their chairmen b

March 19, 2014

Tong Yang eyes new start

The head of Tong Yang Securities remained upbeat about the upcoming sale of the company to Taiwan-based Yuanta Securities.“We are very positive about the merger deal. I believe it will allow us a fresh start,” said Eric Suh, CEO of Tong Yang Securities at a press meeting. He added that Yuanta was financially “very strong and stable,” and that the company’s solidity as Taiwan’s No. 1 brokerage house would provide “much-needed stability” to Tong Yang.“We believe the merger will allow us to regain

March 18, 2014

FSC to tame competition among financial job seekers

A long list of licenses will no longer be a prerequisite for acceptance by state-owned financial organizations, according to plans announced Tuesday by the nation’s financial regulator. Public banks gestured that they would uphold the changes, but expressed doubts as to whether the move would have the intended effect of taming competition in the job market.The Financial Services Commission decided to ban major public financial institutes from requiring job applicants to specify which certificate

March 18, 2014

FSC to tame competition among financial job seekers

Korea’s top two shipping lines weigh down parent groups

South Korea’s two largest shipping lines, which have been struggling to generate profit for years, have started to weigh down their parent business groups, industry sources said Tuesday.Hanjin Shipping Co. and Hyundai Merchant Marines, hard hit by adverse market conditions, are trying to deal with chronic losses and a drop in their credit ratings but are not showing signs of improving anytime soon, industry watchers say.Both Hanjin and Hyundai groups, which control these shipping companies, anno

March 18, 2014

Korean bonds decline as BOK chief nominee hints at no rate cut

South Korea’s government bonds fell for a second day after central bank governor nominee Lee Ju-yeol signaled that the chances of an interest-rate cut are slim.The notes snapped a five-day advance yesterday as Lee said in a prepared statement to lawmakers that the Bank of Korea’s benchmark is “accommodative” and that households need to prepare for higher rates. Lee, who will appear before a parliament hearing tomorrow, is set to replace BOK chief Kim Choong-soo when his term ends on March 31. Th

March 18, 2014

KB Financial seeks to lend helping hand

KB Financial Group is out to help society’s underprivileged with various types of sustainable social contribution activities, the company said on Monday. The group is seeking to live up to the role it has been given as a company upon which up to 60 percent of the population depends for financial transactions. As a part of such responsibilities, KB Financial said one of its key social sharing activities for this year is to offer better education for elementary and middle school students, saying t

March 17, 2014

[Graphic News] Idle money hits record high

Korea saw a record high level of short-term funds flowing into the financial system as economic uncertainty and a bearish stock market led investors to manage their money on a short-term basis, data showed Sunday.The country’s short-term floating capital, such as securities accounts and currency in circulation, amounted to a record 712.89 trillion won ($665 billion) at the end of 2013, up from 666.36 trillion won in December 2012, according to data from the Bank of Korea and the Korea Financial

March 16, 2014

[Graphic News] Idle money hits record high

Shares to face volatility

The nation’s stock market may face volatility this week depending on the geopolitical uncertainty surrounding the crisis in the Crimean Peninsula and the U.S. Fed’s scheduled policy meeting, analysts said.The benchmark Korea Composite Stock Price Index finished at 1,919.9 Friday, down 2.5 percent from a week earlier.The KOSPI came under selling pressure on concerns over a slowdown in the Chinese economy and continued tensions in Ukraine.“The main index may face volatile sessions due to policy un

March 16, 2014

KDB Daewoo faces shareholders’ criticism

Top management of KDB Daewoo Securities, the No. 1 brokerage firm in Korea, is facing a crisis of credibility with a series of negative incidents and poor business performance. Its unfavorable situation includes recent sanctions from the nation’s financial regulator for business irregularities and worsening operating performance, and is drawing market attention ahead of the upcoming annual meeting of the firm’s shareholders.So far this year, the Financial Supervisory Service took punitive measur

March 16, 2014

KDB Daewoo faces shareholders’ criticism

Idle money hit record high amid uncertainties in 2013

Short-term funds flowing in the South Korean financial system rose to a record high last year as economic uncertainties and a bearish run on the local stock market prodded people to manage their money on a short-term basis, data showed Sunday.The country's short-term funds, including currency in circulation, demand deposits and money parked for stock investment, amounted to a record 712.89 trillion won ($665.94 billion) as of the end of December, up from 666.36 trillion won posted a year ago, ac

March 16, 2014

Tongyang to sell 150 billion won worth of shares to Yuanta

Tongyang Securities Inc., a brokerage unit of troubled Tong Yang Group, said Friday that its shareholders approved a proposal to issue new shares worth 150 billion won ($139 million) to a Taiwanese brokerage house.Earlier this week, the parent group had signed a deal to sell a 27.06 percent share in the brokerage unit for some 120 billion won to Yuanta Securities, a unit of Yuanta Financial Holdings Co.Tongyang will sell new shares at 2,100 won per share, 42 percent lower than their face value.

March 14, 2014

Panel guides Shinhan toward ‘smart finance’

Shinhan Financial Group on Wednesday appointed a special panel of experts to help it build a new platform to promote mobile banking.The 24-member Shinhan Smart Innovators panel consists of professionals from a wide range of industries, including finance, mobile manufacturing, legal services and IT business. In 2012 Shinhan established the initial 32-member SSI panel, which recently ended its term, to guide the bank in the right direction under rapidly changing industry conditions. A second panel

March 13, 2014

Panel guides Shinhan toward ‘smart finance’

BOK chief downplays risks of household debt

Bank of Korea Gov. Kim Choong-soo claimed Thursday that it was undesirable for monetary policymakers to seek interest-rate cuts to resolve the country’s household debt problems.The remarks from the outgoing central bank chief came after the BOK’s rate-setting committee kept the benchmark rate unchanged at 2.5 percent per annum on the day, which marked a freeze of 10 months in a row.“Though some (low-income) brackets have shouldered the burden of rising interest costs, it is still not appropriate

March 13, 2014

BOK chief downplays risks of household debt

KOSPI’s sluggishness swells long-short funds

South Korean stock investors, fed up waiting for the KOSPI index to recapture its 2011 record high, are plowing cash into funds that can make money no matter which way the market is headed.Long-short funds, which bet on both rising and falling shares, have grown their assets more than ninefold in the past year to 2 trillion won ($1.9 billion), even as the nation’s equity funds shrank, according to Seoul-based researcher KG Zeroin Co. Individuals pulled $22 billion from stocks since the KOSPI’s a

March 13, 2014

Korean tax authorities to oversee U.S. accounts

Starting next year, the National Tax Service will gain direct access to information on accounts owned by Korean nationals in the United States based on an incoming bilateral taxation convention.With this expanded scope of information, the tax office hopes to add momentum to its overseas network and tighten its grip over potential offshore tax evasion.The Ministry of Strategy and Finance said Thursday that the Korean and U.S. governments are currently holding negotiations for a bilateral taxation

March 13, 2014

BOK freezes key rate for 10th month for March

South Korea's central bank froze the key interest rate for the 10th-straight month on Thursday at the last rate-setting meeting for its outgoing chief as the local economy is improving amid tame inflation.Bank of Korea Gov. Kim Choong-soo and his six fellow policymakers held the benchmark seven-day repo rate, called the base rate, at 2.5 percent as widely expected.The March meeting marked the last rate-setting session for Gov. Kim as his four-year term expires at the end of this month. Lee Ju-ye

March 13, 2014

Korea's jobless rate jumps in Feb., job creation also quickens

South Korea's jobless rate jumped in February, but job creation increased at the fastest pace in 12 years, indicating that more people came out to look for work amid signs that the economy is recovering, a government report showed Wednesday.According to the report by Statistics Korea, the jobless rate stood at 4.5 percent last month, up from 3.5 percent in January. The seasonally adjusted jobless rate also rose from 3.2 percent to 3.9 percent.Job creation quickened sharply. The number of employe

March 12, 2014