banks are about to face with new rule, which called Capital Market Consolidation Act, This rule might change the whole financial system of Korea and there’re many non-Korean banks in Korea. Korean banks have to compete with them. But Korean banks have serious problem with their earning structure. While advanced foreignbanks increase their incomes from the noninterest sector, the domestic bank
the part of the total debt in a country that is owed to creditors outside the country
money owed to private commercial banks, other governments, or international financial institutions such as the IMF and World BankForeign debt management
1) Risk management
currency and interest rate movements
frequent commodity price fluctuations
The debt crises of the early 1980’s
oil price hikes
Appearance of big global bank
Possibility of entering foreign market by expansion of bank’s capital
Diversification of business portfolio in bank holding company
Enlarge of market competition by privatization
Can get high synergy effect when combining with complementary company.
Possibility of monopoly in bank industry
Possibility of expanding system risk
incomplete privatizatio
Hana Bank targets Woori Bank for acquisition
Woori Bank possessed government funds which made it to be controlled under government. By then, soon after it was about to be freed
Hana Bank suddenly changes its target to KEB*
(KEB* had many foreign stocks by which Hana Bank could get many criticism)
Acquisition of KEB* is made quickly and silently
Not very effective
Too muc
foreign exchange market.
To ease a sudden change of exchange rate, government intervenes in market restrictively and irregularly.
4. The Changes of Exchange rate regime in Korea
Exchange rate means the purchasing power of currency a day and it is difficult to decide the exchange rate which is advantageous to one’s country due to the complicated relations of every country in the world. Th