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New chief regulator sets hardline stance

Kim Seok-dong, new chief of the Financial Services Commission, said Monday that the financial regulator will actively intervene in the market if necessary for stability.

“To secure order and stabilize the market, the authority will take stern measures. On the other hand, the authority will guarantee sufficient autonomy for the sake of reform and development of the market,” he told reporters after taking office as chairman of the FSC.

President Lee Myung-bak appointed Kim to the post Friday as part of a partial Cabinet reshuffle.

He emphasized that the supervisory body would never give up its role of stabilizing the market. “The market order is very significant.”
Kim Seok-dong
Kim Seok-dong

Concerning the delayed sale of the state-controlled Woori Financial Group, he said what is the most important is how well the financial company will fare after privatization, rather than how much the government will recoup public fund injected.

Asked if the FSC would intervene in the stalled sale of Hyundai Engineering & Construction, he declined to give a direct answer. He only said the company’s creditors should behave responsibly and show credibility.

He also said the regulatory body will look into whether U.S.-based Lone Star Funds, which is about to sell its controlling stake in Korea Exchange Bank to Hana Financial Group ― had been eligible to become the biggest shareholder of a Korean bank under the Korean banking law.

The three deals hit a snag last year; the government suspended the sale process of Woori as powerful bidders dropped out of the race, creditors of Hyundai E&C withdrew the preliminary contract with Hyundai Group to sell the builder, and the union of KEB is strongly opposing Hana’s acquisition of the lender.

Kim, who was a director general of the FSC, played a leading role in pooling commercial banks bail out cash-strapped LG Card ― now merged into Shinhan Card ― in 2003.

Before joining the FSC, he had served at the Finance Ministry since the 1980s. He most recently worked as CEO of Nonghyup Economic Research Institute.

By Kim Yon-se (kys@heraldcorp.com)
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