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UNCLAS SECTION 01 OF 03 SEOUL 000091 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV MARR ECON KPAO KS US
SUBJECT: SEOUL - PRESS BULLETIN; JANUARY 25, 2010 
 
TOP HEADLINES 
-------------- 
 
 
Chosun Ilbo, All TVs 
U.S. Educational Testing Service (ETS) Sends Security Officials to 
ROK Following Series of Leaks of SAT Test Papers in ROK 
 
JoongAng Ilbo 
Hospital Charges for Cancer Operations Differ 
Up to 5 Million Won 
 
Dong-a Ilbo 
Four Arrested in Second SAT Leak Scandal 
 
Hankook Ilbo 
Liquid Assets Moving to Stock Market 
 
Hankyoreh Shinmun 
Lee Myung-bak Administration Uses 
Media Reform Bill Politically 
 
Segye Ilbo, Seoul Shinmun 
Sejong City Legislation Due on Jan. 27 
 
 
DOMESTIC DEVELOPMENTS 
--------------------- 
 
The ROKG decided yesterday to reject North Korea's proposal to hold 
military talks on Jan. 26 for the time being. A senior Unification 
Ministry official said that the planned Feb. 1 talks with the North 
on the operation of the joint Kaesong Industrial Complex must be 
carried out first and then the two Koreas could sit down to deal 
with military-related matters. (JoongAng) 
 
North Korea yesterday criticized the ROK's recent remarks about a 
"preemptive strike" if there is any indication of a nuclear attack 
from the North as "an open declaration of war." (All) 
 
 
INTERNATIONAL NEWS 
------------------ 
 
According to Japan's Nihon Keizai Shimbun, Kim Yong-nam, president 
of the Presidium of North Korea's Supreme People's Assembly, 
recently presented three conditions for the North's return to the 
Six-Party Talks: 1) signing a peace treaty with the U.S. and China; 
2) talks with the U.S. on regime security; and 3) lifting of 
economic sanctions. (JoongAng) 
 
 
MEDIA ANALYSIS 
-------------- 
 
Secretary Clinton's Speech on Internet Freedom 
Most media on Saturday (Jan. 23) gave straight coverage to Secretary 
of State Hilary Clinton's Jan. 21 speech on Internet freedom. 
 
Coverage highlighted the Secretary's statements: "Countries or 
individuals that engage in cyber attacks should face consequences 
and international condemnation;" and "We look to the Chinese 
authorities to conduct a thorough review of the cyber intrusions 
that led Google to make its announcement (that China should either 
stop censoring Internet searches or risk a pullout by the 
search-engine giant.)  And we also look for that investigation and 
its results to be transparent." 
 
-President Obama's Wall Street Reform 
------------------------------------ 
Left-leaning Hankyoreh Shinmun editorialized on Saturday: "If 
President Obama's financial regulations go into effect, speculative 
investment by large banks will become practically impossible. ... It 
 
SEOUL 00000091  002 OF 003 
 
 
is highly likely that EU nations, such as Britain and Germany, will 
follow suit, given their strong stance toward regulating financial 
markets. ...  President Obama's Wall Street reform does not seem to 
have a major effect on the ROK's banking industry right away.  The 
ROK's financial industry still relatively strictly separates 
commercial banking and investment banking duties.  What is somewhat 
worrisome is, however, that some city banks, while promoting their 
growth into large banks, are trying to expand their high-risk 
investment duties.  Even if investment bank duties are still 
relatively light, now is the time to be on guard against making the 
same mistakes as the big U.S. banks." 
 
An editorial in right-of-center JoongAng Ilbo wrote today: "We 
should be wary of mimicking another country' financial reform.  As 
the ROK's immature opening of the financial market set off a 
financial crisis, it is dangerous to recklessly follow U.S.-style 
financial reforms. ...  Now is the time for the ROK to approach U.S. 
financial reforms from various perspectives and to seek a 
Korean-style financial model that fits its own situation." 
 
- N. Korea 
---------- 
Most newspapers on Saturday carried reports quoting Foreign Minister 
Yu Myung-hwan as telling a Jan. 22 press briefing that he hopes the 
stalled Six-Party Talks will resume sometime around the Lunar New 
Year's holiday on Feb. 14. 
 
Right-of-center JoongAng Ilbo replayed a Jan. 23 report by Japan's 
Nihon Keizai Shimbun saying that Kim Yong-nam, president of the 
Presidium of North Korea's Supreme People's Assembly, presented 
three conditions for the North's return to the Six-Party Talks 
during a recent meeting with a visiting Italian parliamentary 
delegation: 1) signing a peace treaty with the U.S. and China; 2) 
talks with the U.S. on regime security; and 3) lifting of economic 
sanctions.  JoongAng Ilbo wrote in the headline: "N. Korea Indicates 
Intention to Exclude ROK from 'Talks on Korean Peninsula Peace 
Treaty.'" 
 
 
OPINIONS/EDITORIALS 
 
U.S. FINANCIAL REFORM... IT IS TIME TO EXPLORE A 'KOREAN-STYLE 
FINANCIAL MODEL' 
(JoongAng Ilbo, January 25, Page 34) 
 
Financial reform measures unveiled by U.S. President Barack Obama 
are stronger and more comprehensive than expected.  The reform plans 
are designed to block commercial banks from making high-risk 
investments and to limit the scope and size of large financial 
institutions in order to get rid of the "too big to fail" principle. 
 The Glass-Steagall Act which was enacted in 1933 but repealed in 
1999 is being revived again.  Previously, President Obama proposed a 
fee to raise 90 billion dollars in 10 years from top banks to recoup 
every single dime of a Wall Street bailout.  Obama is initiating 
financial reform, buoyed by public anger over massive Wall Street 
bonuses. 
 
President Obama is ready to have an uncomfortable relationship with 
Wall Street which once supported him.  He believes that reckless 
investment by the financial institutions triggered the crisis. 
Obama said, "If those folks want a fight, it's a fight I'm ready to 
have."  U.S. taxpayers complain that the banks "privatize" earnings 
and "socialize" losses.  If U.S. financial reform is carried out, it 
may help to prevent recurrence of a financial crisis.  However, a 
policy dependent on public sentiment yields side effects.  If the 
financial market is constrained, there is a greater possibility that 
a global double dip may occur.  If the U.S.'s financial banks 
suffer, this may jeopardize its national competitiveness. 
(Therefore,) the U.S. seems to be facing a double-edged sword. 
 
Obama's financial reform proposals have already sparked controversy 
at home and abroad.  The U.S. financial sector is lashing out at the 
reform plans.  Even within the U.S. administration, Treasury 
Secretary Timothy Geithner, who took the lead in easing financial 
 
SEOUL 00000091  003 OF 003 
 
 
regulations, and National Economic Council Director Lawrence Summers 
are voicing different opinions.  The reform proposals may be 
considerably watered down when they are presented to the U.S. 
Congress.  Still, the undeniable fact is that the global financial 
market is undergoing transformation.  The U.S. and British financial 
models that existed before a global crisis are not sustainable.  A 
new global standard will reveal itself when some challenges ahead 
are resolved. 
 
We should carefully watch how things play out.  What is imperative 
is that we should prepare against a possible outflow of foreign 
funds in the wake of U.S. financial reform.  Even though we need to 
pay attention to the Obama Administration's effort to remove a blind 
spot in financial oversight, we should note that the ROK's financial 
environment is considerably different from that of the U.S.  ROK 
banks engage in a meager proportion of high-risk investments unlike 
the U.S. and Britain.  It has been a year since the ROK implemented 
the Capital Market Consolidation Act which permits combined 
operation of all financial investment businesses (such as sales, 
brokerage, asset management, discretionary investment advisory 
service).   In this situation, if the ROK joins the bandwagon and 
implements regulations (similar to that in the U.S.), it may have a 
fatal effect. 
 
We should be wary of mimicking another country's financial reform 
measures.  (Since) the ROK's immature opening of the financial 
market set off a financial crisis, it is dangerous to recklessly 
follow U.S.-style financial reforms.  We should think about Obama's 
financial reform from a different perspective.  Struggling financial 
institutions in industrialized countries may open new opportunities 
for ROK financial companies which are seeking to globalize their 
businesses.  Now is the time for the ROK to approach U.S. financial 
reforms from various perspectives and to seek a Korean-style 
financial model that fits its own situation. 
 
 
STEPHENS