Chairman Yim Jong-yong of the Financial Services Commission speaks during his media briefing session held at the International Conference Room of Korea Press Center on March 16. (Photos:FSC)

Chairman Yim Jong-yong said he will focus on deregulating the strict financial rules in the country while he is at the helm of the Financial Services Commission, the watchdog of the financial industry in Korea. The emphasis will be on providing more loans to SMEs to expand their operations and grow, especially in their overseas operations. 

The new FSC chairman has been calling for reforms of Korea's financial industry, which heavily relies on traditional sources of income — commission and interest from lending to investors. 

FSC Chairman Yim enters the FSS office welcomed by FSS Gov. Zhin Woong-sob, to the left of the FSC chairman and FSS officials on March 18.

Yim’s pledge on financial reform and the venture capital market was seen as part of broader efforts to support President Park Geun-hye's “creative economy” drive, which is designed to foster new economic growth engines beyond the nation's traditional manufacturing and heavy industries. 

Yim identified four directions for financial reform that he will lead. First he will reform the financial authorities to the extent that an autonomous culture would be established. They should be like umpires in baseball games, not coaches. In order for them to officiate fairly and completely, Yim said he will change the inspection and disciplinary practices to the level of an advanced nation. Financial sanctions on individuals will be changed to organizational monetary sanctions, while non-official verbal instructions should be made in official statements. Financial institutions should create an organizational culture autonomously, as the individuals working in the financial industry should complete creative and autonomous financial markets, he said. Yim added that any action that tends to erode the sound operation of the financial market and loose protection of financial consumers shall not be left untouched as the entire financial supervisory capacities will be mobilized to deal harshly with them.

FSC Chairman Yim Jong-yong and FSS Gov. Zhin Woong-sob hold a frame carrying the catchphrase “Be United Together for Financial Reform” at FSS Gov. Zhin’s office after the former gave it to the latter.

Secondly, he will see that business firms with creative technologies and ideas are provided with positive financial support from a reformative fund brokering system, which will be set up later. He will touch up the technology loan system to supply funds to business firms in need of financial support.

The new FSC chairman also said the capital market should be revitalized for smooth flow of the financial funds to where they are needed without obstacles. The FSC will guide banks to foster their own capacities to the extent that they can provide funding to firms with excellent technologies.

"The capital market should discover new possibilities and help them succeed so as to provide more opportunities to launch new businesses and create jobs," Yim said. "There should be more financial instruments because investment demand is fast rising to prepare for retirement and asset management in an era of a low birthrate, fast-aging population and low interest rates." 

Third, Yim said he would see that the financial industry takes measures to enhance competitive strength. Businesses ought to find new growth engines overseas with their overseas operations in fusion with non-financial entities, and he will help build the ecological system for fintech, as changes in the global financial market from the fintech have been much greater than anticipated.

Fourth, every care should be taken to stabilize household loans, one of the biggest risk factors facing the financial industry. A stable financial market is the key to any reform of the financial industry. The financial authorities will continue to keep watch on household loans through checkups and the micro management of those loans when needed.

He met with Gov. Zhin Woong-sob of the Financial Supervisory Service and they agreed the two would meet every two weeks to discuss the issues facing the financial industry. 

Yim did not hide his ambition to reform the nation's financial industry in a bid to sharpen its competitive edge in the global market. 

The country's total financial assets stood at 3,575 trillion won ($3.2 trillion) as of September, compared with 944 trillion won at the end of 1997.

Top banking groups such as KB Financial Group and Shinhan Financial Group are 68th and 69th, respectively, in international bank rankings. 

Yim Jong-yong was appointed chairman of the Financial Services Commission on March 13. Prior to assuming the chairmanship, Yim served as Chairman and CEO of NongHyup Financial Group.

FSC Chairman Yim, right, is on a visit to the FSS Call Center during his visit to the FSS head office in Seoul on March 18 with FSS Gov. Zhin watching. 

 FSC Chairman Yim Jong-yong (center) receives a briefing on the overall situation of the Korean capital markets from Chairman Choi Kyung-soo of Korea Exchange (KRX) (left) and Dir. Gen. Lee Hyun-chul of FSC’s Capital Market Bureau as FSC Chairman Yim visited KRX in Yeouido on March 19.