Chairperson Lee Eog-weon of the Financial Services Commission (FSC) said about the recent surge in "debt-fueled investing" (borrowing to invest) that "risk management is important." On the increase in unsecured loans, Lee assessed that it "is not to the extent of posing a threat to soundness." Lee also said that if a financial accident occurs, the agency will revamp financial companies' performance and compensation systems, including a plan to claw back bonuses from the employees involved.
Lee held the first press briefing since taking office at Government Complex Seoul on the 12th and stated accordingly, "It is important to invest within a tolerable range and under one's own responsibility." On the recent rise in unsecured loans, Lee said, "It is not to the extent of driving overall household debt growth or threatening soundness."
Earlier, Vice Chairperson Kwon Dae-young of the Financial Services Commission (FSC) said, "We have viewed (debt-fueled investing) too negatively, but it is a kind of leverage," and the remark sparked controversy.
Lee also expressed an intention to improve financial companies' performance and compensation systems. To prevent executives and employees at financial companies from pursuing excessively short-term results, the agency plans to introduce a say-on-pay system in which each company explains individual executives' compensation plans at the shareholders' meeting, and a clawback system under which bonuses paid to employees are recovered if a financial accident occurs.
Regarding the tax benefits for long-term investors requested by President Lee Jae-myung, Lee said, "Expanding long-term investment creates a stable foundation for developing the capital market and, from investors' perspective, stabilizes returns, so it is an important task," adding, "It is a key task in next year's economic policy direction, so ministries across the government should take interest and push it forward."
Approval for the first operator of the integrated investment account (IMA) to expand venture capital and for additional issuance note businesses could be announced as early as this month. Lee said, "We expect the first review cases related to IMAs and issuance notes could come as early as this month."
For IMA approval, Korea Investment & Securities, Mirae Asset Securities, and NH Investment & Securities have applied, and five companies, including Kiwoom Securities, Samsung Securities, Shinhan Investment & Securities, Meritz Securities, and Hana Securities, have applied for issuance note approval.