The South Korean government's financial deregulation plans aimed at nurturing giant investment banks may stumble due to the US credit crisis, which raised concerns about the risky nature of investment banking, industry watchers said Sunday.
The Financial Services Commission plans to submit 18 revision bills and three new bills to the National Assembly this year to reform the capital market and promote giant financial services firms.
The top financial regulator's plans include privatising state-run banks, easing the bank ownership cap for non-financial companies and revising the Capital Market Integration Act.
As one giant investment bank after another collapses, some lawmakers are calling for a more careful review of the plan to privatise the Korea Development Bank, which had attempted to buy Lehman.
The FSC plans to establish a holding company for KDB this year and list it on the stock market next year, before a full privatisation by 2012.
Also this year, the regulator plans to revise laws to ease bank ownership restrictions for private equity funds, pension funds and non-financial firms to help banks raise large capital.