Stern Warning Issued
New FSC Chairman Kim: Commission means to keep order in the financial market and deal harshly with violators
FSC Chairman Kim Seok-dong
Chairman Kim Seok-dong of the Financial Services Commission said there are many problems to be taken care of in the financial industry, such as insolvent project financing, housing loans and the lack of competiveness of Korean financial institutions in the international financial market. He made the statement at his inauguration as head of the commission on Jan. 3 as a comment on government responsibility to maintain order in the financial markets in Korea.
The new FSC chairman also warned that any financial institution that violates the market order and laws will be held responsible for its acts, adding that market order should be upheld at any cost with the FSC ready to go to any lengths.
Kim also called on the financial institutions do their given duty and play their role in full, which means to provide loans to get the economy moving, stressing at the same time the importance of policy loans for solving low-birth rates, an aging population and new growth engines.
"What a fish in a bowl needs is a drop of water, not a river," Kim said to point out the importance of loans to the general public to show that emergency measures are as critical as basic measures.
Quoting the famous ancient Chinese military strategist Sun Tzu's proverb "Wind, Forest, Fire and Mountain," he said the FSC should move quickly like wind, quietly like a forest, intensely like a fire and heavily like a mountain. "Yeonpyeong Island is not the only place that has soldiers guarding it - everyone at the FSC is a soldier safeguarding the enormous financial infrastructure on the frontlines of the financial industry."
At the derivatives market opening, the FSC chairman said the FSC will be tough on the violation of regulations, including accounting irregularities, and will deal harshly with violators to the extent that they can never again work in the financial market by revising the current laws and regulations.
On the question of the sale of Hyundai Construction, Kim said it's up to the creditors to take into consideration securing their investment and, at the same time, ensuring that the construction company keeps growing. He said the most important factor is for the creditors to act responsibly and instill confidence, which he believes they will do.
On the privatization of Woori Financial Group, he said when the method is decided, the date on which it happens is not important. The only thing of concern is that the financial group should continue to make a profit and do well, Kim said. "Of course, you want to get paid as much as you can, but on the other hand, Woori should do well after the sale," he said.
But there are already rumors swirling that the financial industry is going to return to government management, seeing such a delay in the privatization of Woori Financial.
The new FSC head, well aware of the lack of government hands in the sale of Woori, said he is ready to meddle in the sale of Woori and Hyundai Construction to stymie the rumors. But financial sources said it would be hard for the government to do whatever it wants to do in the financial market because it has grown too big for the government to lead.
They note that with people like KB Financial Chairman Euh and Hana Financial Chairman Kim who are close to the center of power leading the financial industry, the new FSC chairman would not have much room to maneuver in the market as in the past, even if the power to do so was returned to him.
"All of us at the FSC are fully committed to protecting the integrity of Korea's financial market," Kim said on the FSC website. To that aim, we must focus on devising and updating financial policies in tune with the requirements and development in the financial market, which evolves at an alarming pace. Also, we understand the importance of our job especially when the financial markets have become increasingly pivotal as the engine of economic growth.
"As such, our website is designed to keep you informed of the FSCOs recent developments, particularly in regard to our policies on financial market supervision. Through this website we would also like to have your feedback on our overall activities. Also, please let us know of ways in which we can improve the quality of our online content." nw