[Editorial] Even Without Relaxing the Separation of Industrial and Financial Capital, a Reliable Channel for Funding Must Be Established

On the 10th, President Lee Jae Myung stated, 'The principle of the separation of industrial and financial capital is intended to prevent monopolistic abuses, but in high-tech industries requiring large-scale investment, it could potentially hinder industrial development.' He added, 'We are preparing practical measures that do not undermine the principle of separation, and these are nearly ready.'
As President Lee Jae Myung noted, the separation of industrial and financial capital is a regulation introduced in 1982 to prevent the negative effects that could arise if industrial capital also engages in financial business. Chey Tae-won, Chairman of SK Group, requested the relaxation of this regulation during a meeting with the President, to which Lee Jae Myung responded positively.
However, Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, offered a somewhat different stance during the ministry’s policy briefing on the 11th, stating, 'We will not touch the separation of industrial and financial capital at all.' He did, however, mention, 'For sectors requiring large-scale investment, we will ease financial regulations to facilitate capital procurement.'
The remarks by President Lee Jae Myung and Deputy Prime Minister Koo Yun-cheol appear similar but are, in fact, different. The President’s comments suggested the possibility of amending the separation system itself, while Koo Yun-cheol drew a clear line, saying the system would remain untouched. The core intention, however, seems aligned: to maintain the framework of the separation of industrial and financial capital while seeking effective alternatives.
The business community is calling for the relaxation of the separation regulation because astronomical sums are needed to finance high-tech industries. The global competition in semiconductors has become a race for investment. Hundreds of trillions of won are now the norm. On the 10th, Korea also announced a long-term semiconductor investment plan worth 700 trillion won. Major countries are investing massive resources in high-tech sectors, staking their national futures.
The amounts companies must raise are equally enormous. Failure to secure funding leads directly to business failure. It is the government’s duty to clear these financial bottlenecks. The necessity of the separation of industrial and financial capital cannot be ignored, either. Without this system, excessive concentration of economic power could occur, and if a conglomerate owning a bank collapses, the bank could fall as well. There is also the risk of large corporations using banks as private coffers.
However, it is necessary to ease regulations to a minimum while upholding the fundamental principle. The 4% cap on bank shareholdings by industrial capital in Korea is among the strictest in the world. Deputy Prime Minister Koo Yun-cheol made it clear that this rule will not be changed. Therefore, a robust alternative must be provided to ensure that high-tech industries are not hindered by funding constraints.
In its policy briefing, the Ministry of Economy and Finance reported that it would lower the requirement for a holding company’s second-tier subsidiary to own 100% of its domestic third-tier subsidiary to over 50%. This regulation is designed to prevent controlling families and others from exercising excessive control with minimal shareholdings. The ministry believes this rule has become an obstacle to strengthening the competitiveness of industries requiring large-scale investment, such as semiconductors. However, this measure alone is insufficient. Additional solutions are needed.