Lawmakers Grill Finance-Economy Minister on Financial Holding Companies

Article excerpt

Lawmakers of the National Assembly Finance-Economy Committee yesterday grilled Finance-Economy Minister Lee Hun-jai over such pending issues as financial holding companies and alleged state intervention in the financial sector.

The ruling Millennium Democratic Party (MDP) stressed the need to pass a bill on financial holding companies for the second-phase financial restructuring.

The opposition Grand National Party (GNP), however, made its case of linking a bill barring state intervention in the financial sector to the bill on financial restructuring, saying, ``The proposed bill could end up with mega banks whose financial health is weak, rather than strengthening the competitiveness of financial institutions.''

Rep. Kang Wun-tae of the MDP asked questions on the criteria of a clean bank, saying that the purpose of financial restructuring is to turn debt-ridden banks into normal, clean institutions. Kang also stressed on the need of financial holding companies. ``A bill on financial holding companies must be passed. Yet, it would not be a magic bullet. The bill would just be a framework and it should be molded in a way to improve efficiency,'' said Kang.

The MDP lawmaker placed emphasis on sorting out bad loans in the process of financial restructuring while calling on the government to present clear purpose and schedule in pushing ahead financial restructuring as time is running out.

Rep. Lah Oh-yeon of the opposition GNP also voiced concern on financial holding companies. ``I share the view on the necessity of the bill. But problems lie in the government's stance that financial restructuring will work out if the bill on financial holding companies passes through the National Assembly. It is not a panacea,'' warned Na.

The lawmaker also called on the government to clarify on the deep-rooted concern that the government's intervention in the financial sector could deepen, as many financial institutions become de facto government organizations following the injection of public funds into financially beleaguered firms.

On the widely-held view that the government calls the shots in the financial sector, Rep. Lee Jong-il dismissed the notion, saying, ``The denunciations of the government's interference in the financial sector is caused by lack of knowledge in economics.''

MDP Rep. …