Floor leader Kim Byung-ki of the Democratic Party of Korea said on the 16th that he would push institutional reforms to protect financially vulnerable people, including interest rate caps, saying, "We will begin in earnest to discuss the social responsibility of finance."
At a floor countermeasures meeting at the National Assembly that day, Floor leader Kim said, "The current financial structure is paradoxical," criticizing that "the lower a person's credit score and income, the higher the interest rate they bear, while high-credit, high-income groups enjoy low interest rates."
He noted, "Banks always say they are struggling even amid record earnings and year-end bonus feasts," adding, "There are almost no cases where banks went under because of deposits interest and unsecured loans. In most cases, they brought on crises through poor investments and poor collateral. The damage ultimately fell on ordinary people."
He went on, "Now we must establish institutional mechanisms so that financial profits lead to fair growth for society," adding, "There is no single right answer. We need collective intelligence more than ever."
As concrete measures, Floor leader Kim proposed ▲ interest rate caps ▲ creation of a joint fund by financial institutions ▲ stronger compliance obligations for internet-only banks ▲ swift establishment of a Financial Supervisory Commission, saying, "We will also openly discuss concerns that may be raised during the process of building consensus."
The remarks align with the concerns recently flagged by President Lee Jae-myung. At a Cabinet meeting on the 9th, the president pointed to interest rates for illegal private finance prevention loans and minimum-credit-guaranteed loans reaching an annual 15% range, criticizing, "Isn't this too cruel? How can this be called inclusive finance?" He also said, "High-credit borrowers are given long-term loans at low interest, while low-credit borrowers are lent small sums at high rates for short terms. Finance is the most brutal."
With the ruling party leadership moving to discuss stronger accountability for the financial sector, the push for President Lee's campaign pledge to create a "inclusive finance stabilization fund" is expected to gain speed. The plan envisions the financial sector and the government jointly creating a fund to expand policy-based inclusive finance, a concept that financial authorities have been working to realize since the launch of the Lee Jae-myung administration. Financial Services Commission Chairperson Lee Ok-won also said during the confirmation hearing, "We will create the fund in cooperation with the Ministry of Economy and Finance." Within the Democratic Party, some even argue that the contribution rate by banks should be raised from the current 0.06% to 0.2%.
Meanwhile, the Democratic Party plans to pass the government reorganization plan at a plenary session of the National Assembly on the 25th and designate the bill to establish the Financial Supervisory Commission, under the jurisdiction of the National Policy Committee, as a fast-track item. Floor leader Kim said, "If the People Power Party refuses to cooperate even on the government reorganization, it will be hard to avoid criticism that it is holding back state affairs," adding, "If they ultimately reject it, the Democratic Party will pass the government organization act revision bill at the plenary session on the 25th and promptly designate the Financial Supervisory Commission establishment bill as a fast-track item without delay."