The announcement of the U.S. Federal Reserve’s plan to scale back its monetary stimulus has sent interest rates on long-term state bonds around the world upward, indicating that the end of a low-interest era is nearing.Expectations that a tight monetary policy will follow the tapering of quantitative easing in the U.S. on the back of economic recovery have led investors worldwide to unload their fixed-income securities to avert further losing value on their bonds, analysts said.The basic scenari

June 26, 2013

Deputy Prime Minister and Finance Minister Hyun Oh-seok said Tuesday that the government would retool and improve some of its regulations that may have eroded confidence and hindered business growth.Hyun met with leaders of Korea’s five business groups, including the Federation of Korean Industries, in a bid to ease concerns over the government’s push to tame unfair business practices and tax avoidance that may have increased tension in the industry.The minister of Trade, Industry and Energy and

June 25, 2013

Deputy Prime Minister and Finance Minister Hyun Oh-seok said Monday that the government was ready to implement countermeasures against increased capital-flow volatility stemming from the so-called Bernanke Shock.In a meeting with the ruling Saenuri Party, Hyun added that Korea’s economic fundamentals were still intact with a continued current account surplus and few short-term foreign borrowings that limited its exposure to an exit from quantitative easing.Shin Je-yoon, chairman of the Financial

June 24, 2013

The Bank of Korea said Monday that Korea and Japan have decided against extending their bilateral currency swap agreement.“Authorities of Korea and Japan have concluded to end the bilateral won-yen currency swap arrangement equivalent to $3 billion between the two central banks, which is due to expire on July 3, 2013,” said the BOK in a statement.This would end their financial cooperation in which Korea sought to further globalize its currency and use the yen, one of the G3 or top three global c

June 24, 2013

The Korean financial markets continued to take a beating from the “Bernanke shock” that foretold the near conclusion of U.S. monetary stimulus, spurring worldwide asset selloffs.Eroded confidence caused the benchmark stock index to approach the 1,800 threshold as soon as the market opened, while interest rates on three-year state bonds surpassed 3 percent. The won also further weakened against the U.S. dollar.The KOSPI fell about 1.5 percent finishing at 1,822.83 on Friday, following an overnigh

June 21, 2013

The country’s state sector saw its outstanding debt snowball to 915.6 trillion won ($808.8 billion) in first quarter of this year.That figure was about 91 percent higher than the 480.4 trillion won recorded in the first quarter of 2008 when former President Lee Myung-bak took office, according to data by the Bank of Korea on Wednesday.The general government sector consisting of the central government, regional governments and the national and social pension services saw its debt increase by almo

June 19, 2013

Deputy Prime Minister and Finance Minister Hyun Oh-seok said Korea would help Myanmar to adopt the Saemaul Movement, a development model, Korea used during the 1970s to grow the economy under the direction of late President Park Chung-hee, the father of President Park Geun-hye.A group of government officials led by Hyun visited Naypyidaw on Wednesday to hold a series of meetings with Myanmar officials, including Kan Zaw, minister for National Planning and Economic Development of Myanmar.Korea pl

June 19, 2013

Deputy Prime Minister and Finance Minister Hyun Oh-seok said Tuesday that excessive regulatory enforcement against the private sector would hamper business growth and thus the economy.In a meeting with the chiefs of the Fair Trade Commission, the National Tax Service and the Korea Customs Service on Tuesday, Hyun cautioned that too much regulation could send a wrong message to the market as if the administration is out to get every company.FTC chairman Noh Dae-lae, NTS chief Kim Duk-joong and KC

June 18, 2013

Chiefs of Korea Coal Corp. and the Korea Institute of Nuclear Safety are expected to be removed from their posts by the government for their poor management, officials said Tuesday.The two companies received the poorest grade of E on their 2012 management report cards by a team of 159 civilian experts evaluating 111 state-owned and quasi-state enterprises.The Finance Ministry said Tuesday that 16 chiefs of state-run and quasi-state enterprises, including Yeosu Gwangyang Port Authority, Korea Hyd

June 18, 2013

Korea’s antitrust regulator will allow manufacturing-focused conglomerates to own financial subsidiaries such as insurance companies, but only if they reorganize their governance structures to transform into holding companies.In a policy and legislative briefing to the National Assembly’s National Policy Committee on Monday, the Fair Trade Commission said that chaebol, or family-run conglomerates, with a main interest in manufacturing would also have to establish separate intermediate holding co

Industry June 17, 2013

Diageo, a global whiskey maker, said Monday that it has appointed Cho Kil-soo as the new chief executive of its Korean unit.He will replace Kim Jong-woo, who has held the top position since 2007.Cho previously held an executive position at Johnson & Johnson’s Asia-Pacific strategic sales division before joining the maker of the renowned Johnnie Walker and Windsor whiskey brands.He also worked at Nestle and Kellogg. (hkp@heraldcorp.com)

Industry June 17, 2013

The Korea Deposit Insurance Corp. and its subsidiary KRNC are mired in controversy over setting up paper companies in tax havens by former executives and employees of the two state-run financial companies.The Korea Center for Investigative Journalism, known locally as Newstapa, on Saturday released another batch of six Koreans found to have operated two ghost companies in the British Virgin Islands.The six included Kim Gi-don, former CEO of KRNC and former senior manager of KDIC, and five others

June 16, 2013