Хорижий давлатлар банк тизими ва уларнинг ўзига хос хусусиятлари - Экономика - Дипломные работы

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Хорижий давлатлар банк тизими ва уларнинг ўзига хос хусусиятлари

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Хорижий давлатлар банк тизими ва уларнинг ўзига хос хусусиятлари БИТИРУВ МАЛАКАВИЙ ИШИ 1

“Banking system of foreign countries and their main features” Diploma work Plan: Introduction Part I . General information about banking system of South Korea: 1.1 Development of South Korean banking system; 1.2 Elements of banking system of South Korea. Part II . The role of Korean commercial banks in the world financial system: 2.1 General operations in Korean commercial banks and the analyze of their practice; 2.2 Condition of Korean commercial banks in the period of the world financial – economic crisis. Part III . The opportunities of using practical experience of Korean commercial banks for the improvement of Uzbek banking system Conclusion and suggestions Bibliography Appendixe s 2

Introduction “ Uzbekistan constantly pays the closest attention to the development and strengthening of the banking system, and it gives its positive results. However, this work should be more deepened and extended, bearing in mind that the banks are, figuratively speaking, a blood-vascular system that nourishes all our economy on the state of which depend the financial and economic stability in the country.” 1 Owing to an independence of our country new opportunities are appearing year by year. It’s not secret to us that the method which was made by the president of Republic of Uzbekistan, Islom Abduganievich Karimov has been considered by a lot of scientists around the world as one of the best way for development of country’s economy. Especially, the five principles leading the country t

According to the information of South Korean statistical agencies, total volume of South Korean investments to Uzbekistan made more than 1 bln. USD. At the moment total volume of credits granted by Export - import Bank of the Republic of Korea is 94.4 million. USD. Total sum of gratuitous help to Uzbekistan reached 8, 7 mln. USD. Cultural - humanitarian partnership. Since May, 1992, Korean Centre of Education functions in Tashkent. There are agreements on the partnership between the universities of Uzbekistan and Korea; for instance, between the Tashkent state technical university and Seul University, Namangan engineer-pedagogue Institute and Haseo University, Samarkand State Institute of foreign languages and the Universities of Hondong and Haseo. At the State University of foreign langua

1- Part. General information about banking system of South Korea: 1.1 Development of South Korean banking system Formation of a modern banking system, Korea began in the late XIX century under the influence of Japanese capital. In 1878, First National Bank of Japan has opened its branch in the port city of Busan. He has held various banking operations, including the issue of Japanese banknotes, although the country had circulation and Korean coinage. Soon, Japanese banks have created a network of branches in Korea. National Bank of Korea was established in 1909, he received the right to issue domestic notes, passed to him from the First National Bank of Japan. In 1911, that is, one year after the formal annexation of Korea by Japan, the Korean bank was renamed Bank of Chosun. At that time,

In 1960 began the reorganization of the banking system due to the needs of accelerated economic development. In 1961, the majority of the share capital of commercial banks was transferred to the government, and the law on the Bank of Korea has been amended to more effective implementation of monetary policy. In the early 60's. Government has established various specialized banks to provide financial assistance as the least-developed and strategically important industries: the National Federation of Agricultural Cooperatives, the National Federation of fisheries cooperatives, the Bank lending to small and medium-sized enterprises and the National Bank for its citizens. In 1983, the institution of the National Federation of Livestock Cooperatives completed the formation of the modern sys

capital and provide entrepreneurs of medium-and long-term loans have been established commercial banking corporations. In 1972 he began to develop rapidly the stock market as a result of a series of measures aimed at promoting investment in securities and promote corporatization of enterprises. There have also been addressed through legislative measures, including strengthening the functions of investment companies and the establishment of the Commission on the Securities and Exchange Commission and the Council to monitor the securities. Until 1992, foreign investors have the right to invest in Korean securities indirectly - through domestic funds, buying certificates and securities issued by domestic companies exclusively for foreign investors. Since 1992, foreign investors can invest dir

(1981), Korea First Bank and Seoul Bank and Trust Company (1982), Bank Chohyn (1983),. Given that the Commercial Bank of Korea has been privatized in 1972, deregulation was completed all five leading commercial banks. In December 1989, was privatized by the Korean Exchange Bank When Park Chung Hee became president in 1961, he organized a highly centralized government with the power to direct the economy. Park quickly nationalized all banks, took control of foreign borrowing, and merged the agricultural cooperative movement with the agricultural bank. The government also took control of all forms of institutional credit, giving Park great control over the business community. The government began to liberalize the banking system in the mid-1980s by denationalizing several banks, but refused

government; additionally, the bank transacted various government business activities. It also made loans to and received deposits from other banking institutions; all banks maintained their solvency through balances at the Bank of Korea. South Korea's five major commercial banks (Chohung, Commercial, First, Hanil, and Seoul) were privately held. Together with two city bank joint ventures--the Kor- Am Bank and the Shin-Han (co-owned with the United States and Japan respectively)--there were 961 commercial bank branches across South Korea at the end of 1987. Local banks were found in every province. The Bank of Korea regulated all commercial banking activities under the provisions of the General Banking Act passed in 1954. Commercial banks got their money through deposits from the genera

member of the Organization of Economic Cooperation and Development, Korea was clearly in a different league from Thailand, Indonesia, and Malaysia. However, underneath the surface Korea too had serious problems During much of the 1990s foreign banks had been eager to lend US dollars to Korean Banks and the chaebol. A significant proportion of this was short term debt that had to be paid back within a year. This money was used to fund investments in industrial capacity, which as suggested earlier, was often undertaken at the encouragement of the government. By late 1996 it was clear that the debt financed expansion was beginning to unravel. Economic growth had slowed, excess capacity was emerging in a number of industries, prices for critical industrial products such as semi-conductors were

government took the company into public ownership in order to stave off bankruptcy and job losses. This followed hard on the heels of a decision by the Korean government to invest an equity stake in Korea First Bank, to stop that institution from collapsing due to a its bad loans. The nationalization of Kia transformed its private sector debt into public sector debt. Standard & Poor’s, the US credit rating agency, immediately downgraded Korea’s debt, causing the Korean stock market to plunge 5.5%, and the currency, the Korean won, to fall to $1=Krw929.5. According to S&P, "the downgrade of…..ratings reflects the escalating cost to the government of supporting the country's ailing corporate and financial sectors." The S&P downgrade was the trigger that precipitated a sharp sell-

With Korea facing imminent financial meltdown, the prospect of an IMF led bailout of the country was being openly discussed. On November 13th, the Korean government declared that it "did not need help from the IMF", apparently believing that it would be able to arrange bilateral loans from the US and Japan. They were not forthcoming, and on November 17th, with the nation’s foreign exchange reserves almost exhausted, the Korean Central bank gave up its defense of the won. The won immediately fell below the psychologically important $1=Krw1,000 exchange rate, and it kept going south. On November 21st the now humiliated Korean government was forced to reverse course and formally requested $20 billion in standby loans from the IMF. The process was complicated considerably at this point

independent external audits. On trade liberalization, the IMF said South Korea will comply with its commitments to the World Trade Organization to eliminate trade- related subsidies and restrictive import licensing, and streamline its import- certification procedures, all of which should open up the Korean economy to greater foreign competition. Initial reaction in the stock and currency markets was very favorable, with the Korean stock marketing registering a 7% gain, its biggest one day advance ever. However, the package started to unravel on December 8th when the Korean government said that it would take two trouble banks into public ownership, rather than closing them. On the same day, Daewoo, one of the chaebol, announced that it would purchase debt laden Ssangyong Motor under a deal

the uncomfortable fact that Korea was on the verge of default. His first priority was to rebuild confidence and persuade foreign banks to roll over Korean short term debt, thereby staving off an immediate default. The international community was also concerned by the possibility that a Korean default would trigger a banking crisis in Japan, which held $25 billion of Korean debt, an event that would send economic shock waves surging around the world. In the event, a second agreement was reached between Korea, the IMF, and a number of major American and British banks with large exposure to Korea. Singed on Christmas Eve, the agreement called for the IMF and eight major banks to accelerate a loan of $10 billion to Korea to prevent a debt default. For his part, Kim Dae-jung spelled out in clea

loans with maturities of one, two, and three years, bearing interest rates of 2.23, 2.50, and 2.75 percentage points higher than the six month London Interbank rate. By effectively rescheduling so much of its short term debt, the deal gave South Korea some breathing room in which it could begin to rebuild confidence in its shattered economy. 1.2 Elements of banking system of South Korea The Bank of Korea was originally established with a capital of 1.5 billion won, all of which was subscribed by the Government, but the amendment of the Bank of Korea Act in 1962 made the Bank a special juridical person having no capital. Graph № 1. The structure of Monetary policy Committee in the Bank of Korea The primary purpose of the Bank, as prescribed by the Act, is the pursuit of price stability. The

manages the nation's foreign exchange reserves. It also exercises certain bank supervisory functions stipulated in the Bank of Korea Act. Function s 1) I ssuing Banknotes and Coins The Bank of Korea has the exclusive right to issue banknotes and coins in any dimension, design or denomination determined by the Monetary Policy Committee. The banknotes and coins thus issued have the status of legal tender within the country for all transactions, both public and private, without limitation. Graph № 2. Banknotes and issues by denomination The Bank of Korea has the exclusive right to issue banknotes and coins in the Republic of Korea. Their dimensions, designs and denominations are determined by the Monetary Policy Committee with Government approval. The banknotes and coins thus issued have

that the economy may grow in a sound manner on the basis of price stability. To this end, the Bank conducts monetary and credit policy with an emphasis on price stability while taking into consideration such matters as economic growth and financial market stability. The Bank introduced an inflation targeting regime in 1998, and changed the monetary aggregate-oriented operational framework to an interest rate-oriented framework in which the call rate (uncollateralized overnight rate) formed its policy rate and operational target. The Bank reformed its monetary policy framework recently and the new framework was introduced in March 2008. The reform includes the change of policy rate from the call rate target to the Bank of Korea Base Rate, improvements in reserve requirement scheme, regulari

Graph №3. Overnight call rates and policy rates These operations are conducted in two ways: securities transactions and the issuance of Monetary Stabilization Bonds (MSBs). Graph №4.RP transactions of the Bank of Korea ( Figures in parentheses represent number of RP transactions) Securities transactions involve purchases and sales in the secondary market of government securities, securities guaranteed by the government, MSBs and other types of securities specified by the Monetary Policy Committee. Securities transactions take the form of outright sales and purchases or of repurchase agreements (RPs). RPs are employed as a major instrument for the routine adjustment of market liquidity. Since March 2008, RP transactions have been offered each week on a regular schedule and most of them carr

Graph №5. Issue & Outstanding Balance MSBs, which are issued by the Bank, originated as a major tool of monetary policy during the period when volume of government and public bonds that are essential for open market operations remained insufficient. MSBs are now used for the structural adjustment of market liquidity as they carry relatively long maturities. They are issued in different maturities ranging from 14 days to two years, among which the two-year maturity forms the majority. A ceiling on the issuance of MSBs is set by the Monetary Policy Committee every three months in consideration of market liquidity conditions. The outstanding balance of MSBs stood at 155.3 trillion won as of the end of September 2009. T he Bank of Korea operates lending and deposit facilities to control the av

The reserve depository institutions can access Liquidity Adjustment Loans and Deposits, a kind of standing facilities, without restriction on their use in either frequency or scale. These facilities serve the function of limiting the volatility of the call rate within a certain range. The loan and deposit interest rates are set at 100 basis points (50 basis points on the final day of the reserve maintenance period) above and below the Base Rate. Intraday Overdrafts are provided to banks for temporary shortages of settlement funds in the course of a single day. And, as the lender of last resort, the Bank can extend Special Loans in order to ensure financial market stability. As of the end of Septem ber 2009, the Bank's total loans registered 13.0 trillion won, which consisted of Aggrega

Graph №6. Issuance and Redemption of Government Bonds 1) Issuance and redemption of government bonds by the Bank of Korea acting for the government. 2) Based on the end of the year. - Includes issuance according to primary dealer’s option exercise since Sep.2006. Government Deposits The Bank handles the receipt of national revenues and the disbursement of national expenditures as the depositary of the Government. The Government maintains a current deposit account with the Bank to which taxes and all other government revenues are concentrated. The Government's disbursement offices pay treasury funds to creditors by the Treasury Funds Real Time Transfer System, introduced in 2003 and operated by means of file-transfer through the network connecting the Ministry of Strategy and Finance (

The Bank of Korea handles business relating to the issue, sale or redemption of securities representing government obligations in such manner as may be determined by the Government. In addition, the Bank accepts custody of securities belonging to the Government. 5) Developing and Managing Payment Systems The Bank of Korea has responsibility for the operation and management of the nation's payment systems. The Bank provides settlement facilities to financial intermediaries by use of their current accounts with the Bank for final settlement purposes. The Bank has operated a real-time gross-settlement system for large- value interbank fund transfers originally, named BOK-Wire, since mid-December 1994. BOK-Wire was restyled BOK-Wire+ in April 2009, when a hybrid system was added to the sys

www .bok.or.kr/eng/ 6) Managing official Foreign Exchange Reserves The Bank of Korea holds and manages Korea's official foreign exchange reserves. Its principal objectives in their management are to safeguard the value of the reserves and to meet the nation's demand for foreign exchange. Graph №8. Holdings of foreign reserves The Bank makes an effort to stabilize the FX market in consultation with the Government. While the Bank lets the exchange rate is freely determined by economic fundamentals as well as demand and supply of foreign exchanges in the market, it can implement smoothing operation, if needed, to calm disorderly market and mitigate short-term rapid exchange rate changes. In addition, the Bank acts as an agent for the Government in managing the Foreign Exchange Equaliz

The Bank may request information from banks, and from non-bank financial institutions that enter into agreements to hold current account with it, when it deems necessary for the implementation of monetary policy. The Bank may request the Financial Supervisory Service (FSS) to examine financial institutions within a determined specific range. It may also require the FSS to have staff of the Bank participate on a joint basis in the examination of financial institutions. The Bank may request the FSS to submit to it the findings of examinations and on the basis of these findings to order corrective action against the financial institutions concerned. In addition, the Bank may, at its own initiative, inspect the operations and the status of the assets of banks to which it extends emergency loan

- National Accounts - Input-Output Tables - Regional Financial Statistics - Producer Price Index - Financial Statements Analysis - Export and Import Price Indexes - International Investment Position - Business Survey Index - Consumer Survey Index 9) Carrying out Economic Education The Bank of Korea undertakes diverse activities to boost public awareness about the Bank and Korean economy. The Bank conducts economic education activities for youth, led by 'Economic Lecture for School' programs. It also holds economic lectures on request for universities, the military and police services, and non-government organizations. The Bank also runs a weekly 'BOK Friday Lecture' program for the general public. In addition, the Bank holds an annual 'Monetary Policy Challenge' for

Monetary policy The objectives of monetary policy differ over time according to the economic situation of a country. The objectives of monetary policy have varied over time and in accordance with the state of the economy, but price stability is nowadays regarded as the most important objective of monetary policy. This stems from the conviction that sustainable economic growth, which is the ultimate objective of monetary policy, can only be achieved on the basis of price stability. If inflation accelerates, uncertainties over the future mount, dampening economic activities as a whole. Likewise, economic efficiency declines as a result of the distorted distribution of income and resources. T he Bank of Korea has established financial stability as an important policy objective and placed stre

Instruments of Monetary Policy Open Market Operations Open market operations are a policy instrument through which central banks purchase or sell securities including government and public bonds with financial institution counterparts in open markets such as the money or bond markets, and accordingly change these counterparts' funding conditions, thereby adjusting the money supply or interest rate. Securities transactions involve purchases and sales in the secondary market of government securities, securities guaranteed by the government, MSBs and other types of securities specified by the Monetary Policy Committee. Securities transactions take the form of outright sales and purchases or of repurchase agreements (RPs). RPs are employed as a major instrument for the routine adjustment o

Graph №9. Base rates in South Korea while the past decade Payment Systems in Korea The payment and settlement system of Korea was for long heavily dependent on paper-based payment instruments. This is attributable _________________________________ www .bok.or.kr/eng/ 28

individuals' traditionally strong preference for cash as a payment instrument and the well-developed bill and cashiers check system. Nevertheless, the use of non-paper based payment instruments has grown steadily since the 1980s with interbank funds transfer systems such as Interbank Funds Transfer System and the Interbank CD/ATM System being established. Graph №10. Structure of payment system in Korea The spread of e-commerce transactions and introduction of Internet banking in recent years are accelerating the movement toward a further diversification of the range of electronic payment and settlement systems. _________________________________ www .bok.or.kr/eng/ 29

2- Part : The role of Korean commercial banks in the world financial system: 2.1 General operations in Korean commercial banks and the analyze of their practice Korean money guide provides information on bank accounts, money exchange, credit and debit cards and money transfers. If anyone needs to open a bank account, we will explain how to do it - step by step. Banking as a foreigner Opening a bank account in South Korea The process of opening up a bank account in Korea may be easier than what you would have to go through in your home country! The bank will require you to fill out a short application, verify your documents, and assuming there are no problems, you will walk out with a new bank account! Opening a local bank account is quite easy to do in South Korea whether you are a foreign

As a foreigner, it is vital to have a bank account if you plan on making money or spending a lot of it. Also, if you want to transfer your earnings to your home bank, it is more efficient to use local banking services rather than going through companies such as Western Union or MoneyGram . Opening a bank account Luckily, most banks do not place any restrictions on foreigners who want to open up a bank account. The bigger banks provide many services and documents in English and other languages as well. You may be required to present your passport each time you make a transaction or be limited to the amount of money you can transfer home. However, other than those few restrictions, your banking experience should not differ from those of any Korean citizen. When applying for a local bank acco

bank offers interest as an incentive to save. Generally, the longer the term of commitment, the higher the interest rate will be. For shorter term accounts, the interest rates are fairly low for savings accounts (about 2%-4%).  Time Deposit A time deposit account works more like a checking account. Some banks do offer interest on time deposits, but they are generally lower than savings accounts because the interest depends on the length of time you intend to keep your account.  Installment this account requires the client to make monthly installments/payments to the bank for interest. At maturity, the client will have made a profit. This works like a Certificate of Deposit, except the money does not have to be paid upfront, but in monthly deposits. After signing up for an account, you

taxes on a Time Deposit account (numbers were collected in March 2007 and are subject to change). How to pay in South Korea Cash, cards & cheques When traveling, it is always advised to bring your money in several different forms in case of any emergency occurrences. In general, it is easier to make purchases using cash or a credit card (in department stores, bigger restaurants and hotels). Traveler’s cheques can be more of a hassle if not converted into cash once you arrive. Opening up a bank account in Korea will allow you to make monthly payments and bigger purchases without the worry of conversion rates or any questions of validity. South Korean Won (KRW) The country’s official currency is the Won. Notes are in denominations of KRW 10,000, 5,000 and 1,000. KRW 1,000 is called Chon Won

Plastic money: Credit cards, Maestro /Cirrus cards International credit cards (American Express, Diners Club, MasterCard and Visa) can pretty much be used anywhere. However, only some ATM’s will accept foreign credit/debit cards (look for machines correlated with Cirrus, Star, Interlink, Plus, etc). The bank card issued by your bank is not a credit/debit card, but an ATM card. It can only be used to withdraw cash from bank ATM machines. ATM machines are out of service after 11:00PM so plan accordingly when withdrawing cash. Traveller’s Cheques Although traveller’s cheques provide more security compared to cash if lost or stolen, they are not the most convenient form of payment in Korea. Some major hotels, department stores, and large restaurants may accept traveller’s cheques, but most pla

Transferring & Receiving Money Send money to and from South Korea Find out about your options on importing and exporting money to South Korea – available services, fees, restrictions and required declaration. Koreans want you to spend your money in their country and therefore may put restrictions on the amount of money you can transfer out. However, it is your money and there are plenty of resources that allow you to send it home if you wish. Your local bank and other well-known companies such as Western Union and MoneyGram are located all throughout Korea to provide the services that you need. Branch offices of Western Union and MoneyGram are littered all throughout South Korea and are sometimes affiliated with certain banks such as “Kookmin Bank” and “Industrial Bank of Korea.” A simple

you can transfer. Location and accessibility are also key factors to choosing a bank or money transfer service provider. A transfer should take no longer than a couple days to a week to arrive to your other account. Several banks put a limit of 60% of your total earnings that can be wired home. Others are more lenient and may allow you to transfer 80% or all of your money. Loans & Mortgages Financing your home in South Korea Due to the fact that many tenants engage in “jeonsei” contracts, where the total or majority of the cost to rent must be paid upfront, mortgage loans are quite common in Korea. Coming up with a lump sum is difficult for many, so the mortgage provider pays your landlord for the property and you make monthly payments to the provider. Banks, building societies, and other

minimum monthly payments, it is advised that you call your provider to refinance your loan because failure to pay may affect your credit score. How and where to ask Korea Housing Bank, a branch of Kookmin Bank, is the country’s leading mortgage lender especially for low and middle-income families. The Housing & Commercial Bank is another popular residential mortgage lender in Korea. Whether you have a local account with these banks or not, they can provide residential mortgage services for you at your request. There are no special privileges or restrictions for foreign clients. Membership in International Organizations: South Korea is a member of numerous international organizations, including the African Development Bank, Asia-Pacific Economic Cooperation, Asian Development Bank, Associat

capacity of a select group of businesses known for its competitiveness, in addition to securing a globally-competitive workforce and management system. Korea Development Bank was founded in 1954 under the Korea Development Bank Act, and is charged with promoting the nation’s industrial development and economic growth. Since then, KDB has grown and evolved together with the Korean economy, adding new skills and capabilities to meet the changing needs of its customers. KDB’s business network extends to 45 domestic branches, in addition to its overseas offices. The Bank’s future aim is to grow into a global Corporate & Investment Bank (CIB), a goal that it has been steadily working toward by making internal changes to better exploit new opportunities and diversify service offerings. Corporate

Balanced Support across. Industries KDB’s total loans and investments to support Korea’s corporate and SME sectors in 2008 amounted to KRW 30.1 trillion. Out of this figure, KRW 16.5 trillion (54.7%) went to manufacturing companies and KRW 13.6 trillion (45.3%) was provided to no manufacturing companies, emonstrating the Bank’s commitment to balanced support for the national economy. Graph №11. Facility and working capital loans Privatization Plan The KDB privatization plan was announced in June 2008. The plan is aimed at achieving two policy goals. The first is to create a globally competitive corporate investment bank (CIB) group that combines the financial market competencies of KDB and Daewoo Securities. The new entity should spur balanced growth of the domestic industry, which relies

Graph №12. Size & Earnings, Financial Ratios, Credit Ratings According to the specifics of the plan, KDB will be split into two organizations: KDB Holdings (KDBH), a financial holding company, and Korea Policy Banking Corporation (KPBC), a new government financial institution established through spin-off from KDB. Korea Development Bank will remain as the subsidiary of the holding company. Out of the 100% government-held stock in KDBH, 49% will form an in-kind investment in KPBC. The privatization of KDBH will commence with the sales of shares owned by KPBC. The holding company will complete its conversion _________________________________ Annual report 2008 of KDB 40

into a global CIB and become fully privatized upon the sale of the government’s remaining equity stake. However, as KDB’s market stabilizer role is continuously required for Korea’s economic recovery from the deepening financial crisis, initial sales of KDBH shares will commence within five years from the effectuation of the amended KDB Act. During the transition period in which the government will continue to hold a controlling stake in the holding company, the government will provide all necessary support to ensure a smooth launch of the fully-privatized entity. Specifically, Article 44 of the KDB Act stipulating the offset of losses will remain effective, and the government will provide financial guarantees to secure KDB’s external debt. Operating changes to facilitate KDB’s development

Graph №14. Trade finance With global markets on the edge, risk management has belatedly come into focus as a key function imperative for financial companies. While prestigious competitors have collapsed beneath excessive leverage, KDB’s sound financial management has left the organization well-prepared to face the volatility and risks that lie ahead. Risk Management. Financial institutions face a variety of risks emanating from multiple sources: credit and liquidity risks, operational risk, market risk and more. Risk cannot be eliminated, but can be managed using advanced tools to measure risk and set contingency plans in place. Preparations for Basel II. In July 2008, the Financial Supervisory Service gave approval for KDB to adopt the Foundation Internal Ratings-Based approach under Base

Graph №15. Core business areas Managing Interest-rate and Liquidity Risk . Market volatility has increased worldwide during the current financial crisis, and is expected to continue in 2009. In response to sudden fluctuations of interest rates and worsening funding conditions, KDB is making every effort to mitigate interest rate risk and liquidity risk, and secure stable funding to protect its revenue base. Mitigating Operational Risk. Operational risks are defined as exposure to losses arising from inappropriate or faulty work processes, internal workforce or systems and certain external factors. Operational risk has come into the spotlight with the implementation of the Basel II Accord, which includes operational risk assessment criteria. KDB measures operational risk for eight businesse

Attracting Deposits. Competition to attract new customer deposits was intense in 2008, as financial institutions raced to secure their capital base amid the market turbulence. In response, KDB gave its heads of branch offices authority to flexibly negotiate interest rates on deposits, and strengthened its marketing to government and public institutions, ultimately attracting bank deposits of KRW 17.9 trillion, up 16.2% on an annualized average basis from the previous year. Graph №16. Customer Deposit Trends Pension/Trust Market conditions are making it increasingly difficult for banks to post strong profits based only on interest-rate earnings. KDB has aggressively diversified into asset management and specialized trusts to establish a reliable source of fee-based income. Raising Profitabi

Graph №17. Earnings Growth The balance of money trusts closed 2008 at KRW 2.7 trillion, falling by KRW 751.7 billion as large clients including Daewoo Shipbuilding & Marine Engineering and Hynix Semiconductor terminated their specified money trusts at maturity. Property trusts also decreased in value by KRW 1.9 trillion year-on-year as companies undergoing corporate restructuring closed their accounts. The total value of all trusts held by the Bank in 2008 recorded an 18% year-on-year decline to KRW 12.2 billion. Research As the global credit crisis highlights the shortcomings of focusing too strongly on quarterly results; research is again being recognized as a valuable corporate asset. The financial industry in the future will emphasize on knowledge gathering and long-term planning ahead

Graph №18. Organization Chart of KDB Organization Chart of KDB _________________________________ Annual report 2008 of KDB 46

2.2 Condition of Korean commercial banks in the period of the world financial – economic crisis Last year in South Korea just not be called boring - it was rough, dynamic and rich. In this first half year was more positive, than the second. One of the main information so in 2008 for South Korea were the radical changes in the higher echelons of political power by the country. Speaking generally, the rules of the past ten years, the country's liberals that are configured for cooperation with North Korea and a more independent line from the U.S. in South Korea, lost outright both presidential and parliamentary elections. As a result, in South Korea from February 25, the new president was the former head of the construction of the concern, Hyundai and ex-mayor of Seoul Lee Myung-bak, who

major elections, their joy was very short. Since the beginning of May they, and especially President Lee Myung-bak, faced with the most powerful numerous protests that have long been paralyzed political life of the country and forced President Lee to abandon many of its original plans and reforms. The initial reason was the agreement between the governments of Kazakhstan and the United States, which has resumed the import of meat from the United States. However, Korean society has become a widespread view that the ROK President Lee Myung-bak on the eve of his visit to the United States went to Washington to big concessions on imports of beef and exposed, so the health of Koreans in serious danger, as in the U.S. have been previously recorded outbreaks of so-called "mad cow disease. Gra

history of participation in the Olympic movement. The Koreans managed to get the gold, and where never really shone, including swimming and baseball. The period from mid-August until the end of 2008 can be considered a period of crisis for South Korea, and the shocks were both political and economic spheres. As for politics, special attention to themselves attracted inter-Korean relations. Since the second half of August crawled rumors that North Korea's Kim Jong Il is seriously ill and possibly near death. In the South, where the developments in North Korea followed very closely, the news a few months and the events that followed for a long time never left the front pages of local papers. Also widely discussed and possible scenarios of the situation in North Korea after the death of K

U.S. dollar. Foreign investors, trying to keep their savings, have to sell their assets, converting them into cash. This is causing an outflow of foreign capitals from Korean stock market and, consequently, a sharp fall in quotations on the local Stock Exchange. The government of Kazakhstan has adopted a package of measures aimed at reviving the local economy, managed to stop the depreciation of the national currency, but the situation remains very difficult. It is expected that 2009 will be the most difficult for the South Korean economy, although a verdict may be, perhaps, to make and for any state. Against that background, it took several unnoticed great achievement Foreign Trade. In 2008, the value of South Korean products exported abroad during the year, the first break through the $

to the rank of public tasks, but on the positive results of countermeasures is too early to say. In general, the outgoing year in South Korea turned out to be very difficult. The crises shook the political and economic sphere. "Lumina" such a brilliant performance at the Olympics was, but in general they overshadowed the problems and difficulties. Now Koreans are anxiously waiting for in 2009, realizing that the cost is likely to be heavier, but, like all people on the planet, hoping that the end of December next year they will be able to breathe a sigh of relief, saying that the worst is behind us. The Republic of Korea’s economic history---insofar as financial crises are concerned---has been a mixed bag. It successfully navigated the emerging market debt crises of the early 1980s

Equity markets have followed a similar pattern, with the benchmark KOSPI 200 index falling to a low of 948 points in November 2008 (from 2,054 points a year before) before regaining to current levels at 1,684 points. Other financial sector indicators, such as interest rates and capital flows, have demonstrated signs of stress. Capital inflows, for example, fell sharply during the crisis, with portfolio and FDI contracting by 47 and 31 percent, respectively (see figure). Korea’s real economy, however, has fared relatively better through this current episode, especially compared to the Asian crisis. To be certain, as an export-oriented open economy, it has experienced slowdowns along with the rest of the world. However, net exports remained remarkably robust through the crisis, and GDP has f

the epicenter of the crisis in the developed world, the ability of Korea to weather the storm has been admirable. Indeed, the Development Prospects Group's forecast for 2010 and 2011 has the East Asia and Pacific region leading global recovery with 8.1 and 8.2 percent growth rates, respectively, and Korea is expected to follow the region in exiting the global recession. Another thing that makes Korea's sidestepping of a crisis more amazing is the debt context in which all this has occurred. Corporate debt is at an elevated level (113 percent of GDP in 2008), which is comparable to levels prior to the Asian crisis. Bank lending to households reached about 40 percent of GDP. Together, these account for about 150 percent of GDP. The government fiscal balance, at KRW 33.0 trillion, is

balances or short-term debt levels. While the jury is still out on the specifics of the Korean case, a better understanding of the role of reserves in crisis mitigation will certainly be illuminative. Graph №22. Exchange rate during the past periods First, exports benefited from continued robust appetite for imports from the People’s Republic of China (PRC). Also, the PRC’s fiscal stimulus had positive spillover effects. In particular, subsidies for rural households to buy household appliances benefited Korean electronics exporters. Exports to other developing economies also held up relatively well. An underlying driver of exports in 2009 was an average 12.7% depreciation of the won relative to 2008 (Graph №22 ). Graph №23. GDP growth of South Korea _________________________________ Graph

Taking all these factors into account, GDP growth for 2010 is projected to climb to 5.2% (Graph №23). This above-trend performance, largely driven by the low-base effect of 2008 and 2009, will mostly close the wide output gap that opened when growth slumped in those years. GDP growth is forecast to ease to a still-high 4.6% in 2011, as the pace of equipment investment slows from this year’s exceptionally high rate. Inflation is projected to hover around 3.0% in the forecast period, within the central bank’s 2%–4% target band. The stronger won will help contain import prices, and an output gap persists in the economy. These factors are likely to offset the inflation impact of higher oil prices. In the external accounts, merchandise exports in US dollar terms are projected to grow by about 1

3– Part . The opportunities of using practical experience of Korean commercial banks for the improvement of Uzbek banking system Uzbekistan and South Korea have become the strategic partners. Under the leadership of President Islam Karimov, Uzbekistan has made great achievements in the past few years since the country gained its independence in 1991. Macroeconomic stability and stable economic growth rates have proved Uzbekistan's economy is on the right track, the President noted, and acknowledged it as the Uzbek model of economic reforms. The state budget has been implemented with a surplus without cuts in budget spending, while the inflation level did not exceed the forecast and comprised 7.4 percent, the head of state said. In the last decade, Korea became a key political and econo

fields in Uzbekistan. Korea is interested in elaborating and implementing new projects in areas like education, car making, the textile industry, information technology, infrastructure, construction, and oil and gas sectors in Uzbekistan. Among the new projects is a joint development of a Free Industrial-Economic Zone in the Navoi region of Uzbekistan, which has developed industrial structure, skilled manpower and rich raw material resources. “ Navoi” free industrial economic zone – oasis of high technologies . In order to to further stimulate attraction of foreign investments, to create the most comfortable conditions for foreign investments and to use more effectively great economic and investment potential of Uzbekistan Free Industrial Economic Zone “Navoi” was created according to Decr

and comfortable living conditions . According to figures, the volume of trade between the two countries in 2008 jumped 63 percent and accounted for $1.3 billion. Because of the global economic crisis bilateral trade has slightly decreased and marked nearly $1.2 billion in 2009. Uzbekistan and South Korea also consistently extend cooperation in the framework of international organizations. The Korean government has highly valued Uzbekistan's support of Ban Ki-moon for the post at the United Nations. Uzbekistan also supports South Korea's policy toward strengthening peace and stability on the Korean Peninsula and the joint development of Northeastern Asia. The Republic of Korea supports Uzbekistan's bid to join the World Trade Organization (WTO). Recently, Uzbekistan extended its

4th in Tashkent National Bank of Uzbekistan and State Joint-Stock Commercial Bank Asaka have signed agreements with Export-Import Bank of Korea on allocation of US$ 50 mln and US$ 25 mln respectively. These lines of credit are aimed to support financially investment projects that are realized in FIEZ “Navoi”. The Export-Import Bank of Korea (Korea Eximbank) is an official agency providing comprehensive export credit and guarantee programs to support Korean enterprises in conducting overseas business. The bank also provides overseas investment credit, natural resources development credit, import credit, and information services related to business opportunities abroad. Central Bank of the Republic of Uzbekistan on Aug. 25, 2009 issued by the South Korean "Shinhan Bank, a certificate of

privatization of JSC «YolrefTrans» and manages a group that supports the Korean trading companies. Today South Korean business is seriously interested in investing in the prospective project on Establishing the First Free Industrial Economic Zone of Uzbekistan. The visit of more than 100 South Korean businessmen to our country to familiarize with the project FIEZ “Navoi” and participate in the business-forum at the beginning of June testifies that. Another group of businessmen led by the Chairman of Korea Federation of Small and Medium Business Kim Ki-Mun visited Uzbekistan in July to familiarize with the investment opportunities provided in the FIEZ “Navoi”. In the framework of the visit a business-forum and cooperation stock exchange with the participation of entrepreneurs of the two cou

establish in Uzbekistan polyethylene pipes manufacturing plant. Besides, the Chinese experts from the Company "Tian Jin Ring-Top Petroleum Manufacture" together with the Uzbek colleagues will organize the production of oil-and-gas and drilling equipment. All products of these enterprises will be marketed within the country, as well as exported. About 200 additional jobs will be created. The Joint Declaration on the Strategic Partnership, adopted during the visit of the President of the Republic of Uzbekistan to the Republic of Korea in 2006 is one of the most important documents regulating the relations between the two countries. In 2007 a new multilateral format of cooperation of South Korea with the states of Central Asia "The Republic of Korea - Central Asia" was establi

Conclusion and suggestions Korea’s financial system consists of banking and non-bank financial institutions. The Financial Supervisory Commission and the Financial Supervisory Service, its regulatory arm, are responsible for supervising and examining all banks, including specialized and government-owned banks, as well as securities and insurance companies. The FSC has played a key role in financial restructuring and has strengthened the regulatory and supervisory framework governing the entire financial sector. Oversight standards are improving but they will need more time to meet international standards. The Korean branches of international accounting firms generally perform audits. Although audit quality is improving, it is still far behind global standards. The financial foundation of t

(later Office) of Bank Supervision as the regulatory body. In addition to the Bank of Korea Act, the Banking Act was also passed to reorganize the commercial banking system. In the aftermath of the Korean War, due to a chronic shortage of funds, heavy dependence on the central bank for solvency, and underdeveloped financial markets, the traditional tools of the central bank such as rediscount rate adjustment, reserve requirement ratio adjustment, and open market operations could not be implemented properly. Consequently, the government relied on direct or selective control of money and credit to channel funds toward productive sectors. 63

Bibliography 1. Book by President of Uzbekistan Islam Karimov . “The global financial- economic crisis, ways and measures to overcome it in the conditions of Uzbekistan” 2. “Global economic prospects. Crisis, Finance and Growth - 2010”. World Bank 3. East Asian Visions. World bank 4. ADB economics working paper series. Hyun H. Son and Emmanuel A. San Andres. October, 2009 ADB 5. www.bok.or.kr/eng – official web – site of the Bank of Korea 6. www.worldbank.org - official web – site of World Bank 64

Appendix 1 Banking list: South Korea No Country Reporting Institutions Type SWIFT 1 KR ABN AMRO BANK N.V. BR ABNAKRSEXXX 2 KR AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED BR ANZBKRSXXXX 3 KR BANK MELLAT BR BKMTKRSEXXX 4 KR BANK OF AMERICA, N.A. BR BOFAKR2XXXX 5 KR BANK OF CHINA BR BKCHKRSEXXX 6 KR BANK OF COMMUNICATIONS CO. LTD BR COMMKRSEXXX 7 KR BANK OF NOVA SCOTIA BR NOSCKRSEXXX 8 KR BANK OF TOKYO-MITSUBISHI UFJ, LTD., THE BR BOTKKRSXXXX 9 KR BARCLAYS BANK PLC BR BARCKRSEXXX 10 KR BNP PARIBAS BR BNPAKRSEXXX 11 KR CALYON CORPORATE AND INVESTMENT BANK BR CRLYKRSEXXX 12 KR CHINA CONSTRUCTION BANK BR PCBCKRSEXXX 13 KR CITIBANK KOREA INC SU CITIKRSXXXX 14 KR CREDIT SUISSE BR CRESKRSEXXX 15 KR DAEGU BANK HO DAEBKR22XXX 16 KR DBS BANK LTD BR DBSSKRSEXXX 17 KR DEUTSCHE BANK AG BR DEUTKRSEXXX

39 KR MORGAN STANLEY BANK INTERNATIONAL LIMITED BR MSBKKRSEXXX 40 KR NATIONAL AGRICULTURAL COOPERATIVE FEDERATION HO NACFKRSEXXX 41 KR NATIONAL BANK OF PAKISTAN BR NBPAKRSIXXX 42 KR OVERSEA-CHINESE BANKING COPORATION LIMITED BR OCBCKRSEXXX 43 KR PUSAN BANK HO PUSBKR2PXXX 44 KR SHINHAN BANK HO SHBKKRSEXXX 45 KR SOCIETE GENERALE BR SOGEKRSEXXX 46 KR STANDARD CHARTERED FIRST BANK KOREA LIMITED SU SCBLKRSEXXX 47 KR STATE STEET BANK AND TRUST COMPANY BR SBOSKRSEXXX 48 KR SUHYUP BANK HO NFFCKRSEXXX 49 KR SUMITOMO MITSUI BANKING CORPORATION BR SMBCKRSEXXX 50 KR THE BANK OF NEW YORK MELLON BR IRVTKRSXXXX 51 KR THE EXPORT-IMPORT BANK OF KOREA HO EXIKKRSEXXX 52 KR THE KOREA DEVELOPMENT BANK HO KODBKRSEXXX 53 KR TONG YANG INVESTMENT BANK HO TYSEKRS1XXX 54 KR UBS AG BR UBSWKRSEXXX 55 KR UNION DE BANQU

What do I need to open a bank account in Korea? To open a bank in Korea you will need your passport, working visa and alien registration card. Some banks will ask you to provide photocopies. Where can a foreigner open a bank account in Korea? There are plenty of banks that will be more than happy to accommodate you but it might be wise to choose one of the major banks. Foreign Exchange Bank, Kookmin, Woori Bank, Citibank and Shinhan are some of the more prominent banks in Korea. See below for a list of banks in Korea. Which Korean bank should I open an account with? Choosing one of the major banks such as the Foreign Exchange Bank, Kookmin, Woori Bank, Citibank, Shinhan etc., is a good idea. The major banks will most likely have the most English speaking sales representatives and have the

Are there large fees to use ATM machines in Korea? There are fees to use ATM machines in Korea but they are reasonable and some might consider them quite low. Some banks do not charge a fee at all. Can I exchange money? Yes. Most banks in Korea allows the exchange of money. Can I send or wire money to my home country? Yes. If you don't have a bank in Korea you will need to bring your passport, fill out some forms and answer some questions every time you send money home. Your passport will be stamped each time you send money home as well. Once you have a Korean bank account you can send money to your home country. If you have a bank account in Korea you will only have to fill out the forms once. Your passport will only be stamped the first time you send money home. Can I have a certifie

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