New Chairman Kim Tae-hyun of Korea Deposit Insurance Corp. (KDIC) gives his inaugural speech as he took office at KDIC headquarters on Oct. 1.

Kim Tae-hyun, former secretary general of the Financial Services Commission (FSC), took office as chairman of Korea Deposit Insurance Corp. (KDIC) on Oct. 1.

Born in 1966, Kim graduated from Seoul National University, and started his career as a government official in 1992 after passing the 35th higher administrative examination.

He held various positions, including director in charge of financial policy at FSC, senior administrative staffer at the senior economic secretary office at Cheong Wa Dae and secretary general of FSC.

In his inaugural speech, Chairman Kim said, “More efforts will have to be made to prevent bankruptcies of financial institutions before funds are utilized.”

 
He stressed the need for efforts to shore up KDIC’s standing as a crisis response institution to stabilize the financial markets.

“KDIC will have an in-depth look at and predict potential dangers of financial institutions and the financial industry by sharing information among financial safety net institutions,” said Chairman Kim, adding that his corporation will do its best to make the recovery and resolution plan (RRP) system, which was inaugurated in June, a profound means to prevent and timely respond to the insolvency of systematically important financial institutions (SIFIs).

 
Kim called for revamping deposit insurance regimes and overall fund structure. He also cited preparedness and responses against savings banks’ special accounts and the termination of deposit bond repayment funds.

“KDIC will make its utmost efforts to dispose of its stakes in financial institutions, including Woori Financial Group,” Kim said.

KDIC will retrieve as much public funds it has injected as possible by pushing the termination of insolvent financial foundations, he said.

The government injected 12.8 trillion won into Woori during the 1997 Asian financial crisis. It came up with a plan to finish selling its stake in the financial firm by 2022, in accordance with a three-year roadmap.

KDIC plans to sell up to two-thirds of its remaining 15.13 percent stake in Woori by the end of this year.

As for the protection of financial consumers, he said KDIC will make every effort to implement a system to retrieve wrongly remitted money, which was introduced in July.

Chairman Kim said KDIC will help depositors of the bankrupt Busan Savings Bank ease the pain caused by damage related to the savings bank’s extension of loans in Cambodia as soon as possible.

Looking at the past, Chairman Kim said KDIC has held up the financial markets for the past 25 years by overcoming the 1997 Asian financial crisis and the savings bank crisis, and the corporation has grown into a deposit insurance institution that is recognized for its achievements globally.

KDIC has fortified its financial crisis response system by introducing the RRP regimes of SIFIs. The corporation has made a feat of expanding the protection of financial consumers by introducing a creative system of retrieving wrongly remitted money.

KDIC made an achievement of recovering of 82.4 trillion won in deposit insurance repayment funds six years earlier than planned.

Chairman Kim cautioned about potential danger and rising instability surrounding our current economic environment.

“The unprecedented spread of the COVID-19 pandemic still dampen normal economic activities and daily life, and global financial instability jitters are exacerbated by the U.S. Federal Reserve’s tapering and fears over interest rate hikes,” he said.

Kim warned that household debts could boomerang on both financial companies and households which end up in bankruptcy if they are not thoroughly managed.

He noted that it is more important to make efforts to achieve a balance between the benefit and protection of consumers in the wake of the launch of new types of financial services through digital financial innovation like big data, blockchain and metaverse.

A view of the building where KDIC has its offices in Seoul. (Photos: KDIC)