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Seoul launches panel on financial hub
Participants discuss liberalizing accounting market by 2007 to increase accessibility for global firms.
Determined to propel the plans for transforming Korea into a Northeast Asian financial hub, the Finance Ministry yesterday held the first Financial Hub Initiative Committee meeting.
A decision-making panel of 30 public and private sector officials headed by Finance Minister Han Duck-soo soon plans to establish basic financial hub laws to improve the business environment for foreign investors. The panel will meet on a biannual basis to check their progress.
The envisioned laws will mainly include reforms to promote transparency in the financial sector and efforts to support multinational financial companies conducting business here.
The hub panel also discussed liberalizing the local accounting market by 2007 to increase accessibility for international firms. Panelists said they are considering allowing foreign accounting firms to open local offices, in addition to permitting mergers.
The legal service market is also expected to be opened in phases.
In the asset management market, the hub committee is reviewing the idea of utilizing the foreign reserves being managed by Korea Investment Corp. and government pensions to invest in East Asian restructuring funds.
Next year, Korea plans to open an information center on bond operations to provide better and more accurate data.
Foreign investment in the local bond market is currently low at about only 0.58 percent of the total amount outstanding.
The government plans to increasingly seek outsourcing for pensions and funds, while local financial institutions will be urged to step up investment in China to join industrial development projects in the East Asian region.
Residential conditions should also look up, the Finance Ministry said, as a train will be installed to cut the traveling time between Seoul and the major airports.
By 2007, the train should connect the capital city with Incheon International Airport, and with Kimpo Airport by 2010.
The Finance Ministry first decided to initiate the new hub committee amid the snowballing criticism flung at the slow rate of progress shown in pursuing the financial hub vision that was first conceived by the central government two years ago.
Despite the increasing volume of deregulatory measures, Korea's image is a far cry from a throbbing mecca for global financial companies.
In a recent survey by a state-run think tank, Korea's brand image fell one notch from last year to 13th place in 2005. It trailed Japan and China, Asia's top two nations.
According to foreign respondents, Korea fails to be adept at pitching itself to overseas investors.
Especially in the financial sector, foreign participation remains low. The bullish markets have yet to coax multinational companies to list their shares on the main bourse.
Still, some achievements were witnessed in terms of market size, the Finance Ministry said, citing the jumping market capitalization of the local bourse that stood at 121.9 percent higher in November this year compared to 2003.
Bond issuance also increased, while the daily foreign exchange market trade increased by nearly 80 percent from two years earlier.