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Opinion

Korean banking needs its crisis

Woori’s woes shine a light on a banking system that is backward and lacks ambition.

Korean-won-flag-R-600

Some scandals titillate. Others can shock or make you laugh. But a few resonate because they reflect a deeper unease – a feeling that something, somewhere, isn’t quite right. 

So it is with Woori Bank, which was rocked in October by claims it bought financial favours by offering jobs to the children of powerful public officials. Since then South Korea’s second-largest lender by assets has lost its chief executive, been castigated in the public realm and raided by federal prosecutors. 

To an impartial observer with no knowledge of the machinations of Korea’s economy and society, this might seem a storm in a teacup. True, the charges do not reflect well on Woori. It cannot be coincidence, its detractors say, that the bank offered jobs to college graduates at the precise moment that its coffers were flooded with cash from public agencies run by their mothers or fathers. 

Documents shown in parliament by a fiery lawmaker, Sim Sang-Jung, corroborate these allegations. One cogent example involves the alleged transfer of W193 billion ($180 million) into Woori’s accounts by a regional government, in exchange for them hiring the son of the deputy mayor.

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