On the 29th, Chairperson Lee Eok-won of the Financial Services Commission said, "Among the three major transition policies for a grand shift to productive finance—policy finance, financial companies, and the capital market—the most important task is rationalizing bank capital regulations," adding, "We will continue to identify, discuss, and flesh out additional tasks not only for credit risk but also for operating risk and market risk."
At a meeting that day with the heads of 20 banks at the Korea Federation of Banks in Jung-gu, Seoul, the Chairperson said, "As the first task in rationalizing capital regulations, we have announced measures to improve capital regulations related to banks' investments in stocks and funds," and made the remarks.
Earlier, the financial authorities decided to lower the risk weight for banks' equity holdings from the current 400% to 250%. The financial authorities projected that, as a result, risk-weighted assets in the banking sector would decrease by 3.16 trillion won, expanding capacity for loans to corporations.
Regarding consumer-centric finance, the Chairperson said, "A debt adjustment program for long-term delinquent claims is set to launch soon," adding, "If vulnerable borrowers can make a fresh start through finance and the virtuous cycle of our economy and society is strengthened, I believe it can bolster the stability of the financial system and lay the foundation for the sustainable growth of the financial industry."
On trust in finance, the Chairperson said, "A string of hacking incidents in the financial sector is causing inconvenience and damage to financial consumers," adding, "We will swiftly push ahead with various institutional improvements, including introducing a penalty surcharge and strengthening the authority of the chief information security officer (CISO)."
The Chairperson urged, "Please expand the reflection of serious industrial accident risk in banks' credit screening and provide incentives to excellent corporations to strengthen efforts to prevent serious industrial accidents," adding, "To enhance the sustainability of regions facing the risk of demographic extinction, it is necessary to further expand the supply of finance tailored to regional characteristics through ongoing communication and cooperation with local communities."
The Chairperson added, "Youth jobs are the hope of our society and the foundation for sustainable financial development," saying, "We ask the banking sector to provide opportunities for work experience such as internships for young people and to make efforts to expand hiring."
Cho Yong-byeong, chair of the Korea Federation of Banks, said he agrees with the direction that bank funds should shift away from concentrating on real estate and be sufficiently supplied to low-income people, genuine demand-side borrowers, and corporations, and noted that the sector will promote the revitalization of productive finance by identifying future strategic industries such as semiconductors that will drive the economy and actively supplying funds. In particular, he expressed his intention to actively participate in the National Growth Fund to support the related ecosystem.