Remarks at the National Growth Fund Report Conference
"If Separation of Industrial and Financial Capital for CVCs Is Eased, Banks Can Make Large-Scale Investments"
Jin Okdong, Chairman of Shinhan Financial Group, has requested the government to ease the separation of banking and commerce regulations for corporate venture capital (CVC).
On the afternoon of September 10, at the National Growth Fund Report Conference held at Front1 in Mapo, Seoul, Chairman Jin called on President Lee Jae Myung and other government officials to relax the separation of banking and commerce regulations for CVCs.
The event brought together President Lee, ministers from relevant departments, and representatives from industry, finance, venture capital, and startups to report on the 150 trillion won National Growth Fund. Over the next five years, the National Growth Fund will support companies in advanced strategic industries such as artificial intelligence, semiconductors, biotechnology, vaccines, robotics, hydrogen, secondary batteries, displays, future vehicles, and defense.
Chairman Jin stated, "Even five years ago, when I was a bank president, I made similar requests at events like this," and explained, "If the separation of banking and commerce regulations for CVCs is eased, banks will be able to invest alongside companies, significantly increasing the investment pool."
He added, "As far as I know, Korea is the only country in the world that restricts CVCs with the separation of banking and commerce regulations," and emphasized, "If you refer to the Silicon Valley ecosystem and exempt CVCs from these regulations, a company could invest 50 million won while a bank could invest as much as 500 million won."
He also humbly accepted criticism of banks for focusing on easy, collateral-based business. Chairman Jin said, "We take the public criticism of our reliance on collateral-based business very seriously," and promised, "The root cause is a lack of foresight, so we will work to develop accurate credit evaluation methods and strengthen our industry analysis capabilities."
Cho Yongbyoung, Chairman of the Korea Federation of Banks, also pledged support for the National Growth Fund. Chairman Cho explained, "Currently, a lot of capital in Korea is concentrated in real estate or deposits. However, deposit interest rates are low, and real estate investments take a long time to recover funds."
He continued, "For the nation to grow together, we need core competencies. If the government provides the foundation and banks and companies support the middle, the public can participate as senior investors. If we move toward a win-win structure where everyone can share in the benefits, we can achieve significant growth."
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