Financial Hub in Making
DPM Han Duck-soo pledges further deregulation of capital markets

Deputy Prime Minister Han Duck-soo said the government will soften various irrational regulations to ensure fair competition for both domestic and foreign capital in the financial market.
Han, who also is the finance minister, made the remark during his speech at a briefing session invited by the European Chamber of Commerce in Seoul on November 2. He said the pension funds, for example, are prohibited from participating in mergers and acquisitions by regulations. He said the government's financial hub policy has a symbolic meaning to further reform the financial systems.
The top financial policy maker said the government has been improving the financial infrastructure of the country such as the financial regulations and the foreign exchange regulations on a continuous basis to bring them up to the international standard and as the first stage in legislating the proposed financial consolidation law, the draft of the law related to integrating the capital market will be ready by the end of this month and be submitted for parliament approval next year.
He said the motto 'Financial Hub Korea'symbolizes the efforts of the Korean government in response to overall challenges and conditions. Through these initiatives, the government will comprehensively overhaul the financial market system. The past two years have seen meaningful outcomes, but Korea still faces challenging tasks to address ahead; The tasks include deregulation of the financial system; development of asset management industry; nurturing qualified finance professionals; establishment of global networks, and the enhancement of consistent policies. He said the government has a number of plans for swift deregulation of its financial market. In order to draw out development and innovation in the financial markets, regulations must be dramatically eased.
The government is working in two directions toward this financial system innovation. The first is consolidating the current regulation system sorted by industries into a system categorized by function. The other direction is making a transition from the current positive-list system to a negative-list one. These two directions will encourage innovation in developing new financial products and business operations. The top economic policymaker said foreign exchange liberalization will be extended further. For instance, starting next year, all capital markets will be liberalized by removing the remaining few regulations. With the restructuring of the investment trust industry, AUM (asset under management) has recovered its level of 200 trillion won for the first time since 1999.
In addition, when the retirement pension policies come in to effect at the end of this year, the asset management pool is estimated to increase to 71 trillion won. These achievements will serve as the foundation for further development of the asset management industry.
Han also said the government will try to have as many as foreign asset management firms set up operations in Korea so that domestic firms would learn advanced financial operations know-how from them. The government at the same time will push for the establishment of a graduate school of finance to expand the number of financial experts in the country. DPM Han said the government will positively react to the aging and wealth distribution problems in such a way that the sectors doing a good job would continuously be encouraged, while those lagging behind would be given support to improve to achieve balanced growth of the economy. Stressing the importance of finding new growth engines, he said the government feels the need for supporting the growth of the financial and service industries.
Han said legal and systematic measures for the financial hub initiative will be established. Tentatively named, "Act on the Creation and Development of a Financial Hub,"this article will be ready by early next year. He said the government has already set up the Financial Hub Promotion Committee, for which representatives from the private and public sectors will join together. nw

Deputy Prime Minister Han Duck-soo delivers a speech at a meeting of the European Chamber of Commerce in Korea.