Large Corporations in Opposition to Merger between EximBank and KSure

SEOUL, KOREA- As to the issue of a merger between Korea EximBank and the Korea Trade Insurance Corp., major large corporations are in opposition of the government's plan.According to industry sources on July 28, most business group representatives who participated in a recent forum held by the Financial Services Commission were of the opinion that a merger of two functionally different institutions may backfire without yielding intended synergies.

The forum was organized under the direction of President Park Geun-hye who said, "The policy banking reform must be made from the viewpoint of consumers." The forum was attended by representatives of the Federation of Korean Industries, the Korea Chamber of Commerce and Industry, and the Korea Federation of Small and Medium Business, as well as SK Hynix.

The representatives said that it would be increasingly hard for a single bank to shoulder all the risks, especially given the current trend toward bigger construction projects overseas. They also suggested that Korea EximBank, which is subject to the Bank for International Settlements capital adequacy ratio, would find it exceedingly difficult to take the insurance burden for super-large projects because of the international regulation.

The Financial Services Commission will soon come up with recommendations based on what has been discussed in the forum and announce an official policy banking reform proposal by the end of August.

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