FSC Chairman Calls for Responsibility-Based Management in Meeting with Financial Group Heads

Participants pose for a photo before a meeting between heads of Korean financial watchdog organizations and chairmen of financial groups at the Press Center in Jung-gu, Seoul, on March 31. From left are Yang Jong-hee, vice chairman of KB Financial Group, Ham Young-joo, chairman of Hana Financial Group, Lee Seok-joon, chairman of NH NongHyup Financial Group, Kim Joo-hyun, chairman of the Financial Services Commission (FSC), Lee Bok-hyun, chairman of the Financial Supervisory Service, Lim Jong-ryong, chairman of Woori Financial Group, Jin Ok-dong, chairman of Shinhan Financial Group and Kim Kwang-soo, chairman of the Korea Federation of Banks. (Photo: FSC)

On March 31, Kim Joo-hyun, chairman of Financial Services Commission (FSC), held a meeting with Lee Bok-hyun, chairman of the Financial Supervisory Service (FSS) and the heads of Korea’s five major financial groups and the chairman of the Korea Federation of Banks.

Kim called for joint efforts to stabilize financial markets and enhance people’s trust in the Korean financial sector, and cooperation in spreading a culture of responsibility-based management.

The failures of some major overseas banks has a limited impact on the Korean financial market, but as Korea must remain vigilant, financial institutions must make joint efforts to stabilize the Korean financial market in preparation for uncertainties at home and abroad.

Kim asked them to have interest in support programs for vulnerable borrowers under a high interest rate environment, such as debt restructurings for those who received loans during the COVID-19 pandemic period, and special guarantees for those with poor credit records and requested cooperation in minimizing increases in interest rates by absorbing cost increases, especially interest rate hikes, as much as possible in the financial sector.

Kim emphasized the importance of internal control and risk management capabilities, which have been highlighted by global banking problems, and asked the Korean financial industry to strive for responsibility-based management to become a trusted industry.

In addition to the internal control system improvement work that has been carried out recently, the FSC will improve corporate governance including the appointment of competent and qualified CEOs at financial companies, Kim said.

Kim pledged to continue to promote regulatory innovation and a disciplinary system reform to boost the financial industry’s competitiveness and innovation, provided that responsibility-based management is realized in the financial sector.

Seventh Financial Regulatory Innovation Meeting

“The recent shutdown of Silicon Valley Bank (SVB) and the acquisition of Credit Suisse (CS) by UBS have reminded us of the importance of financial market stability as uncertainties in the financial markets have expanded due to rapid interest rate hikes,” Kim said in the Seventh Financial Regulatory Innovation Meeting in early April.

“Nevertheless, the Korean financial industry needs to prepare for the future through regulatory innovation in line with digital transformations.”

For the Korean financial industry to develop into a world-class financial one with strong global competitiveness based on the trust of financial consumers and the market, the FSC will promote financial market stability and financial regulatory innovation in a mutually harmonious manner, Kim said.

Kim stated that he expects to promote competition for corporate loans in the banking sector by improving regulations on Korean won loan-deposit ratio for Korean branches of foreign banks and said that he will continue to make regulatory improvements through checking the difficulties of foreign bank branches in Korea.

Boosting Korean Financial Investment Industry’s Global Competitiveness

The FSC announced in the middle of April that it will endeavor to introduce systems such as those for deregulations to sharpen the Korean financial investment industry’s global competitiveness.

This includes improving the NCR System for corporate credit provided by overseas subsidiaries of Korea’s general investment companies and introducing the cornerstone investor system.

The second Relay Seminar on Boosting the Financial Investment Industry’s global competitiveness was held at the Korea Exchange on April 17.

The event was co-hosted by the Korea Financial Investment Association and the Capital Market Research Institute and sponsored by the Financial Services Commission and the Korea Exchange.