Chaebol Unlikely to Own BanksA top official at the Minisry of Finance and Economy said on February 22, 'The government has shelved plans to allow chaebol groups to own banks, and will not revise current banking laws to permit them bank ownership. Currently it is not allowed because the government wants to promote chaebol's further restructuring, but in the future it may be possible.'
Accordingly, Hyundai which is going to merge its merchant bank with Choheung and Kangwon Banks may be allowed to increase its maximum allowable four percent stake in the future.
He explained that the government will maintain the ban on the ownership of banks by large conglomerates and any decision to amend banking laws will not be discussed for the present future. He added that chaebol groups are too busy restructuring their operations and have a weakened capability to mobilize money needed to own a bank at this time.
Furthermore, although there are conflicting opinions inside the government on the issue, Chong Wa Dae is very reluctant to allow chaebol groups to own banks.
He added, 'In the event the government creates a way for chaboel groups to own a bank by revising of bank law, chaebols are expected to spend far greater effort to purchase a bank than on restructuring. It will be a barrier to speeding up structural reform.'
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