FSC vows to ease entry rules for foreign banksRegulations governing foreign banks’ operations in Korea are expected to be eased.
Financial Services Commission Chairman Yim Jong-yong said during a Foreign Bankers Group meeting early Friday that the top financial regulator would ease a set of measures including prerequisites for setting up operations in the country.
For one, the requirement to open up an office prior to requesting permission to operate a branch in Korea will be lifted, according to Yim.
Other requirements will also become more flexible. One of the areas that the financial regulator looks into when reviewing foreign banks’ applications for Korean operation is the institution’s international credibility. Criteria for international credibility have included its credit rating, assets size and the number of overseas branches.
Under the revised standards, more diverse and flexible criteria, such as whether the institution is listed on a stock market, will also be considered.
Risk-weighted ratios, which are used when calculating assets requirements for banks, will also be relaxed. Presently banks from OECD nations were given a 0 percent risk-weighted ratio. The revised rule will also apply 0 percent ratios for countries with sovereign credit ratings of AA- or higher.
The change will lower risk-weighted ratios for Chinese banks from the current 20 percent to 0 percent.
“Financial reform is a national agenda that we are working on to provide more convenient services to our people and companies and to boost global competitiveness,” Yim said in his speech.
There are 39 foreign banks in Korea from 16 different countries, and 20 foreign bank representative offices from 16 countries.
BY PARK JUNG-YOUN [firstname.lastname@example.org]