News Regulations02 Apr 2018

South Korea:Financial sector braces for reform under new regulatory chief

02 Apr 2018

Mr Kim Ki-sik, a former lawmaker and veteran civic activist, takes over as Financial Supervisory Service (FSS) chief today, following his nomination to the post last Friday.

This is the first time a politician has been appointed to lead the FSS since it was founded in 1999. The country's top financial regulator, the Financial Services Commission (FSC), which made the appointment, said in a statement that it picked Mr Kim, 52, for his many years of experience in civic activism that "developed reform-oriented economic policies and coordinated various relations of interests".

Known as the "sniper" of financial companies and chaebol, he is unlikely to tolerate irregular practices, according to a report in The Korea Times.

Mr Kim has stressed the need for reform of the governance structure at financial companies and stronger protection of financial consumers. Most of all, he has been negative about conglomerates owning financial companies which he believes is hampering the development of Korea's financial industry.

Under Mr Kim's leadership, the FSS is likely to strengthen "integrated supervision on financial groups" which was introduced to block conglomerates from using their financial subsidiaries as their ATMs.

In integrated supervision, the FSS will look into details such as the financial subsidiaries' total exposure to group subsidiaries and the ratio of group transactions.

With Mr Kim at the helm, the FSS is likely too to strengthen protection for financial consumers. He has been negative about high fees and interest rates that financial companies levy on customers. He has been critical of complicated insurance products sold through home shopping channels. 

 

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