Later, under government pressure, he agreed to a mid-2001 target date. In the past, one Seoul Bank officer typically wore many hats, negotiating a loan to a customer, analyzing the risk, signing the approval, and booking the transaction before obtaining routine endorsement at higher levels. The lack of clear distinction of roles makes mistakes and deliberate deception harder to detect, a blind spot that contributed to the collapse of Britain's Barings Bank in 1995. With advisers from Deutsche Bank, Seoul Bank is building what the industry calls firewalls, separating the treasury trading desk from the settlements department, for instance. The bank has also hired more loan officers, beefing up its analysis of customer credit worthiness.
Some employees grumble privately that the tighter controls are driving away customers.
One small manufacturer of music discs, Shinsegae Sound Ltd., recently began dealing with two additional banks. A Shinsegae spokeswoman says the firm, a longtime Seoul Bank customer, made the change because credit procedures have grown cumbersome. To that end, he has gone after lax workplace discipline. Mr. Kang, who had a reputation at Citibank and Bankers Trust for being candid and promoting integrity, began issuing decrees soon after he took charge at Seoul Bank. Those rules have held, he says.