Today marks Korea's Big Bang, as the Capital Market Consolidation Act, which is meant to revolutionise the country's financial markets, is finally implemented. But don't expect too many fireworks.
The decline then death of the US investment banking model, which had inspired the Act's many drafters, will mean a search for a new prototype. While the demonization of derivatives and structured products, widely blamed for the global financial meltdown, must make regulators and legislators wonder why they bothered at all.
The intention, first set out in the Indirect Investment Act in 2004, was admirable, fixed firmly in a recognition that Korea was ready to move from a predominantly low-cost...
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