Relaxing Regulations
Foreign banks will soon be able to apply for approval of their branches right away when they make a foray into the Korean market, the Financial Services Commission (FSC) said. The FSC said recently that it will lower barriers against foreign banks that want to do business in Korea and give them more self control. This means that a foreign bank will not need to set up an office before opening a branch in the country. In addition, the financial watchdog said that it will be more flexible in judging the international credit of a foreign bank, one of the items screened by the FSC for foreign banks that apply for business in Korea. For example, the Korean government will judge foreign banks’ international credit by various criteria such as being listed on overseas stock markets, since they do not plan to engage in receiving savings and do not need to protect savings account holders.
The government will also rationalize the use of national risk weights. The FSC will make an authoritative interpretation that it will apply a risk weight of 0 percent for companies with credit ratings of AA- or higher by external credit rating agencies or OECD credit ratings (Grades 0 and 1). Paperwork to prove the real names of non-residents will be decreased. Currently, agents for foreign corporations have to hand in a notarized letter of attorney every time they engage in financial transactions.