투자은행과 이해상충

Abstract

Conflicts of Interest in the New Investment Banking Industry in KoreaHwa-Jin KimThe Korean National Assembly has enacted the so-called ‘Capital Market Integration Act’ in July 2007. This new law consolidates seven capital market-related laws into single body of statute. Starting from early 2009, Korean securities companies would be able to offer asset-management services to their clients, and vice versa. The purpose of the law is to enhance the ability of Korean financial institutions through the abolition of the walls created for each financial service so that they can compete with global investment banking firms. One of the hot issues in the legislative process was the conflicts-of-interest. Korean securities firms already suffer from serious conflicts-of-interest problems in their operations under the current regime. If they are allowed to expand their areas of business into the asset management, the problem would be worsened. This paper briefly introduces the mechanism that the new law adopts to cope with such concern. And, then this paper studies the experiences of the United Kingdom where elaborate legal regime to control the conflicts-of-interest has been evolving since long time ago. This paper also looks into the conflicts-of-interest problems particularly in terms of the mergers and acquisitions business of investment banks. The new law would promote the mergers and acquisitions business of the Korean securities companies, and the advanced wisdom of the foreign jurisdictions would be needed. This paper concludes with the remark that the new law not only enhances the opportunity for Korean financial institutions but also increases risks involved in the enlarged operation of the securities as well as asset management businesses. The ethical standards of the Korean financial institutions should be upgraded as the market practice under the new law develops in full scale.