Lee Chan-jin, the head of the Financial Supervisory Service, said on the 28th that there has been some evaluation that the banks have been somewhat deficient in their inherent function of supplying limited financial resources to essential and appropriate places necessary for national economic growth.
On this day, Lee presented four directions for the future of the banking sector during a meeting with the heads of 20 domestic banks held at the Bank Hall in Jung-gu, Seoul: protecting financial consumers, strengthening internal controls, expanding productive finance, and revitalizing support for small and medium-sized enterprises and small business owners.
Lee noted, "In the future, we will prioritize protecting financial consumers in all tasks related to financial supervision and inspection," adding, "What I said in my inaugural speech about largely strengthening consumer protection and responding sternly to financial crimes is an unwavering principle." He particularly mentioned the incomplete sale of equity-linked securities (ELS), stating, "There should be no large-scale violations of consumer rights."
Lee pointed out that banks are focusing on "interest" profits while stressing that financial resources should be supplied to productive sectors such as artificial intelligence (AI). He said, "The Financial Supervisory Service will actively promote improvements in soundness regulations and the revitalization of venture capital supply."
Lee also urged strict management to prevent circumvention of the '6.27 regulation' that limits housing mortgage loans to 600 million won. He said, "Banks should work harder on household debt management focusing on total debt service ratio (DSR) regulations and loan assessments based on repayment ability."
Regarding strengthening internal controls, Lee stated, "If financial accidents such as personal information leaks and employee embezzlement occur in banks, it is no different from a safe with a broken lock," emphasizing, "To prevent financial accidents, a fundamental strengthening of internal controls focusing on high-risk operations is required."
Lee emphasized the support for small and medium-sized enterprises and small business owners, urging management to facilitate the smooth extension of maturity for borrowers affected by COVID-19, which is set to end in September.
Cho Yong-bong, the chairman of the Bankers Association, conveyed concerns related to the double imposition of monetary sanctions (penalty surcharges and fines) under the Financial Consumer Protection Act. He also suggested that incentives be provided for financial companies that practice win-win finance and that the simplification of procedures is necessary to activate debt adjustments. Lee noted, "We will actively review improvements to the system."