Choi Jong-ku was officially inaugurated as chairman of the Financial Services Commission (FSC) on July 19 in a ceremony at the FSC auditorium.
South Korea's top financial regulator said he will be more active in reining in household debt, calling it the biggest risk facing the nation's economy in his inaugural speech at the ceremony. The former deputy finance minister, who served at the finance ministry for about three decades, is tasked with slowing down the nation's growing mountain of household debt and restructuring some of the country's bloated business sectors.
"As household debt is deeply linked to our economy's structural factors, such as the property and welfare systems, I will actively tackle the issue," Choi emphasized.
In his inaugural speech, the new chairman said he would like to note that he deeply appreciates the hard work put in by his predecessor, Chairman Yim Jong-ryong, and his colleagues at the FSC. Choi said he and the FSC have tough problems on hand which need their attention, including excessive household debt, corporate restructuring and financial support to the needy class of people in the country.
“What we also have among the problems are the unstable global financial market and fall-out from the global financial market on domestic financial market, all of which are not easy to solve,” he said. Choi said he feels a heavy responsibility, but “feels confident knowing that all of you are with me in tackling these problems as they can be taken care of one by one with you.”
The new FSC chairman said FSC’s realm of responsibility and duty are to keep the financial system stable respecting the financial market, maintain fair market order and contribute to the national economy.
The new FSC chairman recalled President Moon’s inaugural address, in which he called for equal chances for everyone, with fair procedures with just results.
“These words resonated with what all of us at the financial authorities always thought our mission to be; ‘righteous finance,’” Choi said. He added that he would like to note three core policy directions for the FSC to uphold, the first being “trustworthy finance.” “We should build finance based on trust as it is at the center of every advanced financial industry around the world. A trust finance with principles upright is the base of all basics,” he said.
The second policy direction he noted was “inclusive finance” to build a financial atmosphere to help everyone in the country survive together through working-class finance, which is what financial authorities should take care of best. As the financial market grows, so has its social responsibility, and the FSC should see that the underprivileged class gets the financial support they need, he said. He will forbid any ads and recommendations to mislead financial consumers to take out “easy” loans, to add to their already high debts.
Choi said he will come up with measures to ban any “easy loans” provided to young people without little ability to sustain themselves financially, and lessen the pains of debts for them. Choi said he will see that policy loans for the young working class, who are willing to work, are given opportunities. He will also take measures to clean up the small amount debts so that the debtors are free from their financial obligations and build new lives. The new FSC chairman said “productive finance” is the last of the financial directions for the FSC to pursue.
He said it’s about time to suspend the consumer finance that allows a short-lived prosperous life with long-term debt.
He will focus on the flow of funds into the productive sectors to expand potential growth and workplaces to create jobs, and help SMEs and venture startups with superb technologies to realize their growth as much as their potential, all the while reforming the current financial systems. Choi said he will first change the policy loans to be channeled to workplaces where jobs can be created and have civilian commercial banks follow suit.
In the age of the 4th Industrial Revolution, the financial industry can be a high value-added industry creating jobs continuously. “We should ease regulations and in fusion with IT should boost competition in the financial industry so that the financial services mixed with fintech can be introduced,” Choi said. “We should be able to create many jobs in the financial industry while upgrading convenience to the financial consumers”