Woori Bank Head Warns of Coming Wimbledon Effect on Financial Sector
- He calls on government to deregulate regulations to form negative system to help domestic capital

Whang Young-ki, president of Woori Bank, warned that the financial community would lose its dominant right in the domestic financial industry if onslaught of foreign capital continues to expand in the country.
He issued the warning at the New Year Forum of Top Managers held at Coex InterContinental Hotel in Seoul hosted by the Federation of Korean Industries(FKI) Jan.13.
He called on the government to ease various financial regulations and turned them into a negative system to boost the effectiveness of domestic financial institutions, fearing Wimbledon effect on the financial industry.
By Wimbledon effect, the leading banker in the country meant that no English tennis players won Wimbledon tennis tournament in recent years although the world-renowned tennis event is held in Britain every year for many years. He fears that foreign capital would be major players in every sector of the financial industry, including banks, securities firms, and insurance firms, among others if left alone.
In his speech entitled, "Changes in Financial Environment at Home and Abroad and Chances," the Woori Bank president said Samsung Electronics and Hyundai Motor have been beating their foreign rivals overseas markets, but domestic financial capital have been shaken up by foreign capital at its homeground. "Financial people should take full responsibility for the situation and apologize to the nation," he said.
Foreign capital could kick-off competition in the financial market and boost the solidity of management among positive effects, but they could create a situation where small firms and individuals would be hard pressed to secure finances and thus endanger the stability of the financial system, he said.
On international financial environment for this year, the leading banker in the country said the dollar would continue to weaken with a strong possibility for the reevaluation of the Chinese wian currency. International investment capital would flow in and out of the country. He said the world economic growth would slow down a bit this year.
The world trade has been growing due to U.S. current account deficit, which in turn caused the dollar to weaken. U.S. current account deficit is likely to grow to $600 billion in 2004. Exporting countries have been selling their own currencies to keep their export goods competitive and buy U.S. dollar-denominated financial assets especially U.S. treasury notes to keep their own currencies weak.
He said when China revalues its currency, most Asian currencies will be appreciated. The Chinese currency's appreciation would affect the flow of funds at international financial markets, along with effects on Korea's foreign trade, exports, in particular.
He predicted that Korean exports will grow weak in U.S. market in particular when the Wian currency is reevaluated, except those in competition with Chinese goods.
Exports of raw material and parts would have hard time if Wian is appreciated, although goods used in China's domestic market would see exports grow.
Major trading countries prefer to raise interest rates to cool down real estate markets and inflation rates. U.S. interest rate would be hiked to 2.25 percent per year with China boosting its interest rate from 5.31 percent to 5.58 percent. Britain would raise its interest rate from 3.5 percent to 4.75 percent. Both Japan and EU would not raise interest rates due to concerns for depression and low growth.
Whang called on the government to prepare measures to cope with rapid changes in the foreign exchange rates. Small and medium firms would have to rely on financial institutions to cope effectively with the change.
He also called on major firms in the country to pay attention to securing talented personnel and training them to be ready for future growth. nw