Parties fail to agree on key bills on easing regulations

SEOUL, Rival parties failed Thursday to narrow their differences about bills on easing Internet-only banks' ownership cap and other key deregulation measures.

The bill aimed at raising nonfinancial firms' ownership limit for web-only banks from the current 4 percent is one of the most contentious issues pending at the ongoing extraordinary session of the National Assembly.

The parties earlier agreed to pass those bills in a package deal after President Moon Jae-in asked for parliamentary cooperation on the economy and business deregulation.

The floor leaders of the rival parties made last-minute efforts to reach a compromise ahead of a plenary session slated for Thursday. But they failed to close their differences on the scope of a new ownership cap and whether to apply the new rule to large nonfinancial companies.

"It is very regrettable that we've failed to pass those bills today," Hong Young-pyo, the floor leader of the ruling Democratic Party (DP), told reporters.

The DP wants to raise the ownership cap to 25-34 percent, while the main opposition Liberty Korea Party (LKP) proposed 50 percent.

The current bank law prevents family-owned conglomerates from gaining control of lenders on concerns that they could easily get credit for their expansions.

President Moon hopes to ease the regulation on Internet-only banks' ownership to foster innovation in the financial sector as part of his reform drive.

Two Internet-only banks -- K-Bank and Kakao Bank -- were launched last year, but they have faced difficulty in achieving sustainable growth as their two biggest shareholders, KT and Kakao, are unable to issue shares for the banks' capital increase.

The DP also claimed that conglomerates with more than 10 trillion won (US$9 billion) in assets should be excluded from a list of nonfinancial firms subject to the deregulation on Internet-only banks.

But the LKP said that the level playing field should be provided for all companies, and after then, the financial regulator should review whether they are suitable to be the biggest shareholder of web-only banks.

As for bills on business deregulation, the parties agreed last week to combine their respective bills aimed at designating new business areas and districts with regulatory benefits and to try to pass them at Thursday's session.

The DP has submitted a law revision for temporarily easing regulations in an initial stage of business projects, while opposition parties' proposals call for across-the-board deregulation in designated industries.

But the parties have yet to reach an agreement on key details about the bills before putting them up for a vote.

Meanwhile, through bipartisan cooperation, the parties tentatively agreed to increase the period for guaranteeing existing tenants' contract renewal to 10 years from the current five. The governing DP proposed 10 years, while the LKP wanted eight years.

The move comes as small businesses and self-employed businesspersons are feeling the pinch the most of a slumping economy and the government's recent minimum wage hikes.

But the bill on protecting tenants could not be put forward for a vote as the LKP is calling for the passage of controversial bills in a lump-sum manner.

Source: Yonhap News Agency

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