가칭 통합금융법추진에 대한 비판 -은행의 특수성과 시스템규제의 분리 필요성 = Some Criticisms to the Consolidation Movement of Financial Laws in Korea -The Special Features of Banks and Systemic Regulations

다국어 초록 (Multilingual Abstract)

Since April of 2002, the Financial Law Center at the Seoul National University (hereinafter FLC) has strongly argued that the current financial regulation system should be reformed from the traditional institution-oriented one to the new function-oriented one, modeled on the U.K. functional regulation system inaugurated by its Financial Services and Markets Act of 2000. However, this argument has some fatal errors because the FLC does not have any deep understandings as to the current U.K. financial system and its relevant historical backgrounds. In addition, the FLC does not fully grasp the basic natures of financial regulations. Nevertheless, the FLC has made the Ministry of Finance and Economy (hereinafter MOFE) believe that the functional re-structuring of the Korean financial system should be a norm. My paper aims to educate the FLC by identifying and correcting its fallacies, thus helping the FLC and the MOFE to restore their common senses. There have been three types of financial regulations in the financial sector worldwide, such as systemic regulation, prudential regulation, and conduct of business regulation. Either systemic or prudential regulation focus on the liquidity, solvency, riskiness and general health of individual financial institutions, thus requiring the regulation and supervision of institutions rather than of the functions performed by those institutions. In contrast, conduct of business regulation focuses on functions without regard to individual institutions. Despite some differences, all of these regulations are designed to fully protect clients instead of institutions themselves. Client protection issues in the financial sector arise for two main reasons: (1) because financial institutions where clients maintain their funds go insolvent; or (2) because financial institutions behave in conflict with the interest of clients. Systemic or prudential regulation are concerned with the former, on the other hand conduct of business regulation is related to the latter. The FLC is overbiased by the conflict of interests issue, and of course the characteristic of which is purely functional. Intentionally disregarding the former, the FLC does simply propose the physical consolidation of all the laws and regulations in the financial sector. However, such a simplified approach can be subject to a lot of criticisms, because the insolvency of a financial institution and its contagion effect to other institutions should be more significant issues in the financial regulation context. In addition, it should be noted each regulation does have its own purpose, scope and limit that can not be chemically unified at all with each other. In the traditional institution-oriented approach, regulation has been directed at financial institutions without regard to their extended business areas following to the universal banking strategy. Different regulations apply to different types of institutions, such as banks, mutual savings and loan associations, and insurance companies. This approach is still in place when considering systemic and prudential issues, which must necessarily focus on individual institutions because it is not functions but institutions that become insolvent. Only for conduct of business purpose, however, function-oriented approach may be more useful for enhancing consumer welfare especially in the securities transaction areas. The coverage of conduct of business regulation would include information disclosure, honesty and integrity, the manner in which financial advice is given to retail clients, competence requirements, and so forth. Since 2002, the FLC has published some distorted information about the recently legislative trends of some advanced financial countries, including the U.S. and Australia. My paper does not fully understand any private reason why the FLC has taken such a wrongful action. However, the MOFE should be more cautious to this fact that, until now, the U.K. is the only country adopting the consolidated financial regulation system in the world. If the European Union does not agree to the U.K. approach in the near future, nobody knows the destiny of the Financial Services and Markets Act of 2000. Any scholastic comments and advices to my paper are welcomed.