Lee Chang-yong "KDB Privatization Failure, Regrettable and Wrong Decision"

National Assembly Confirmation Hearing Response

Lee Chang-yong, nominee for Governor of the Bank of Korea, is attending the confirmation hearing held at the National Assembly on the 19th, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Seo So-jung] Lee Chang-yong, the nominee for Governor of the Bank of Korea, expressed the view that the privatization plan of the state-run Korea Development Bank (KDB), which was previously pursued but eventually abandoned, was a wrong decision.

At the confirmation hearing before the National Assembly's Planning and Finance Committee on the 19th, Lee voiced this regret in response to a question from Seo Il-jun, a member of the People Power Party, who asked, "You led the privatization policy of KDB in June 2008 when you served as the Vice Chairman of the Financial Services Commission. What is your current view on that?"

In 2008, the government pursued a policy to convert KDB into a private commercial bank and establish a new institution dedicated to policy finance using the proceeds from the sale, but later withdrew the plan.

Lee said, "I sincerely pushed for the privatization of KDB, so it is regrettable that it reverted to its original state," adding, "The purpose was to expand private sector functions through KDB's privatization to develop the investment side, while modernizing public functions through a policy finance corporation."

He continued, "Unfortunately, after I left public office, this policy reverted to its original state, which I heard caused significant costs, so it was considered a failure," and said, "Given that there was little change by 2015, I think the decision to revert KDB's privatization was a wrong one."

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