Groping for Growth Strategy of Savings Bank as a result of signing the Korea-U.S. FTA

한.미 FTA 체결에 따른 저축은행의 성장전략 모색

Domestic industries are facing the open era as a result of signing the Korea-U.S. FTA with no exception to the financial industry. The FFA between two countries is expected to produce pros and cons for domestic financial industry. Therefore, it is very important to minimize the shock caused by opening our financial market and to adopt the advanced financial tools actively. Signing the Korea-U.S. FTA and enforcing the Integration Law of Capital Market are leading a big crisis to the Savings Banks which have been shrinking under the dramatically changing domestic financial environment since the financial crisis. To cope with financial globalization, Korean Savings Banks are demanded to build up their concrete identity and reposition their status. This is related to shaping the long-term position of domestic financial industry. Therefore, the Savings Banks must take the growth strategy for their survival, and it is an inescapable choice. Several options are available: big scale operation and diversification of business functions, reinforcement of local-focused mediating function of funds, establishment of strategic alliance with other financial firms, reinforcement of risk management system and core competence, nourishment and employment of professional manpower, and active deregulation and policy support. When the Savings Banks are refurbished as an independent local bank performing the central role of local finance, the bright future can be their destiny under the enormously changing global financial environment. Also, two more conditions need to be satisfied: to establish horizontal networks among local banks directed by cooperative Korea Federation of Savings Banks to reverse the weak scale position, and to satisfy their own peculiar niche market with internal countermeasure to face global financial networks.