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| Financial Supervisory Service (FSS) Governor Lee Bok-hyun, center, speaks at the meeting with foreign investors held at FSS headquarters in Seoul, Wednesday. Courtesy of FSS |
By Yoon Ja-young
Financial Supervisory Service (FSS) Governor Lee Bok-hyun held a meeting with foreign investors on Wednesday, explaining the service's consistent and effective supervision directions to encourage investment in Korean financial companies.
Attending the meeting held at the FSS headquarters in Seoul were experts from leading asset management companies including J.P. Morgan.
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| FSS Governor Lee Bok-hyun / Yonhap |
"In response, the Korean government took active measures to ensure calm and stability. And thanks to the effort, we have been able to maintain a stable market environment. And the financial industry as a whole remains sound," he added, stressing the FSS's efforts to ensure stability in financial system given that the road ahead still seems long and bumpy.
He stressed that the banking industry needs to become more competitive from a mid- to long-term perspective.
"Banks play a critically important public role in the marketplace, although they are private and commercial institutions. Lately, they have been facing criticism that they are not doing their part in the marketplace even after reporting record high earnings," he said, citing limited competition and an oligopolistic market structure as the reason behind such negative sentiment.
He also mentioned that financial companies should have discretion in making decisions about shareholder returns based on a sufficient loss-absorption capacity.
"Banks have to be well capitalized to absorb losses and faithfully play the role of providing funds to the real economy. And the 'mutually beneficial finance' that gives due and balanced consideration to diverse stakeholders including shareholders and consumers is the best possible decision that can be made for long-term growth."
In addition, he strongly expressed the regulator's will to proactively tackle potential risks that arise from the markets to prevent risk contagion.
"The FSS has switched its monitoring of financial firms with project financing loan exposures to real-time surveillance of individual real estate project financing businesses," he said.
He also mentioned the need to improve regulations such as the separation of banking and commerce in a more flexible and reasonable way since the financial industry is faced with a rapidly changing environment including digital transformation and the "big blur" between conventional industries and finance.
"In this regard, we plan to reform the capital markets so that they are better aligned with global markets. And by doing so, we would like to lift obstacles that have kept foreign investors from investing in Korean markets," he added, citing the government's plan to extend the operating hours of the foreign exchange market and repeal the registration requirement for foreign investors, as well as mandating disclosure filings in English for listed companies.
According to the FSS, the participants highly appreciated the financial regulatory chief's direct in-depth discussion on major issues and communication with market participants. The FSS vowed there will be continuous efforts to provide foreign investors with opportunities to get information about Korea's financial markets and financial sector.
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