Financial regulator to soften regulation on fintech

Gov't redesignates KDB, IBK as public firms, brings them under scrutiny

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Published : 2014-01-24 15:26
Updated : 2014-01-24 15:26

The government on Friday redesignated the Korea Development Bank and Industrial Bank of Korea (IBK) as public firms, placing them under state inspection after their privatization plans were scrapped.

The Korea Exchange (KRX), the country's main bourse, stayed as a public institution despite its efforts to be delisted, mainly from criticism against its lax management, the finance ministry said.

Once designated, the institutions come under a set of regulations on management transparency, accountability and evaluation, and must abide by government-set guidelines on budgeting and appointments and dismissals of board members. They are also subject to mandatory public management announcements and customer satisfaction surveys.

The two banks were removed from the list in 2012 during the Lee Myung-bak administration as the government sought to privatize them at the time.

The privatization plan was later scrapped by the incumbent Park Geun-hye government that took office early last year.

The Korea Exchange has been trying to get off the list, but a state committee that reviews the designations decided against the removal. The bourse has been blamed for loose management, paying out lavish bonuses and stipends to CEOs and senior employees.

"Considering that the KRX has been named one of the organizations subject to reform because of high salaries and extravagant spending, the committee decided to maintain its designation," the finance ministry said. But it left room for future consideration, saying it may be removed "once the organization is found to have successfully implemented its reform measures under government guidance."

The total number of public institutions increased to 304 from 295 as seven other organizations, including the National Institute of Ecology and Women's Human Rights Commission, were added to the list, the ministry said. (Yonhap)



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