More cooperation in financial sector with Islamic nations expected: Lee

SEOUL, Jan. 13 (Yonhap) -- South Korean President Lee Myung-bak expressed hopes
Tuesday the country will increase exchanges in the financial sector with Islamic
nations as their rapid economic growth provides new chances for investment.
"South Korea and Islamic nations have focused their exchanges in areas of
construction and trade. From now on, I (also) expect exchanges in the financial
sector to sharply increase," President Lee was quoted as saying in a speech for a
forum read by Jun Kwang-woo, chairman of the Financial Services Commission.
The Korean financial watchdog is holding a seminar to discuss how to introduce
Islamic finance into Korea with related experts on Tuesday and Wednesday.
In the 1970-80s, many South Korean builders entered the Middle Eastern market by
clinching large scale orders, giving a boost to the rapid growth of the Korean
economy. Last year, on the back of skyrocketing oil prices, Korean construction
firms enjoyed a boom in overseas orders.
Islamic financing is emerging as an attractive sector because petrodollars are
boosting liquidity in the Middle East, whose market remains relatively insured
from the impact of the U.S. subprime mortgage rout, analysts say.
"As economic growth in Islamic countries are picking up, Islamic finance is on
the spotlight as it could provide new opportunities for funding sources and
investment," he said.
South Korea's current financial rules and accounting standards conflict with
related Islamic laws, which makes it difficult for local financial institutions
to tap Islamic markets.
The Korean financial regulator is studying ways to allow local firms to take
advantage of Islamic finance in a bid to help them expand cooperation with those
in the Middle East and diversify funding sources.
sooyeon@yna.co.kr
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