Hydrophilic resin containing oxazolidone rings and coating composition containing same

A method for producing a hydrophilic modified resin comprising:

• reacting (a) an oxazolidone ring-containing epoxy resin of the formula:
• ##STR2## wherein R is the residue of a diglycidyl ether or rester compound with removal of the glycidyloxy group, R' is the residue of an organic diisocyanate with removal of the isocyanate group, and n is an integer selected such that the number average molecular weight of the hydrophilic modified resin is from 600 to 4,000, with (b) a first active hydrogen compound selected from the group consisting of a monoalcohol, a diol, a mixture of said monoalcohol and diol, a monocarboxylic acid, a dicarboxylic acid and a mixture of said mono- and dicarboxylic acid in less than stoichiometric amount based on the active hydrogen atom/epoxy group ratio;
• and
• reaction the resulting product with (c) a second active hydrogen compound capable of introducing an ionizable group to said hydrophilic modified resin in at least a stoichiometric amount relative to the remaining epoxy groups.