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South Korea mulls placing 3 banks under greater government supervision

The South Korean government is considering categorizing three state-owned banks as "public enterprises" in a bid to increase supervision on the companies, The Korea Herald reported Jan. 18.

The Ministry of Strategy and Finance will meet by Jan. 31 to discuss changing the status of Korea Development Bank, Industrial Bank of Korea and Export-Import Bank of Korea and seven other organizations considered as "other public agencies" into "public enterprises." The move will place the banks under the supervision of the Finance Ministry, in addition to that of the Financial Services Committee, Financial Supervisory Service and the National Assembly which currently supervise the banks.

The Korean Financial Industry Union has opposed the move, calling it excessive bureaucracy which can lead to misuse of power and can weaken banks' global compatibility.

Further, the Finance Ministry is considering whether to make the Korea Securities Depository a quasigovernmental organization.

There are currently no government-run financial institutions categorized as public enterprises in South Korea.