Boundaries in financial business must be eliminated so that banks should stretch to securities operation and brokerage houses vice versa to upgrade the Korean financial industry standards, said Yim Jong-yong, chairman of Financial Services Commission (FSC).

In an interview with Maeil Business Newspaper on Monday, Yim said he has done his best over the last two years as the country’s top financial official, and advised his successor to place top priority in breaking down the walls in the financial sector.

President of Korea Federation of Banks Ha Young-koo and Chairman of Korea Financial Investment Association (KOFIA) Hwang Young-ki recently had been in heated discussions about violations in the playing field of one another.

The banking and securities industry have been strictly protective of their turfs, fearful for branching out or letting others in and being complacent in their exclusivity, said Yim.

This has slowed advance in the financial industry and helped little to benefit consumers. The two would have to compete for consumers to upgrade their service standards, he said.

He predicted large conglomerate structure would inevitably evolve to meet market demands. “Companies would come under greater pressure from foreign and institutional investors, and they would likely change to meet the market desires rather than their owners’,” he said.

Samsung Electronics had accepted the buyout program recommended by U S. activist fund Elliott Management owning a 0.62 percent stake in the company and is benefiting from stock rally.

Yim said private equity funds can do more in corporate restructuring activities so that promising but financially-strapped companies can have a second chance.

By Bae Mi-jung

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