Financial Services Commission to Improve Practice of Imposing Fines on Minor Issues Case by Case

"Improvement Plan for Suspension of Review Also Prepared"

Dokyu-sang, Vice Chairman of the Financial Services Commission

[Asia Economy Reporter Kim Hyo-jin] Financial authorities have decided to improve the practice of imposing fines on financial companies.

On the 6th, Do Gyu-sang, Vice Chairman of the Financial Services Commission, stated during a video financial sector meeting, "We will critically reflect on whether the government is entrenched in supplier-centered thinking and practices in carrying out financial administration, and whether there are any unreasonable systems and practices," announcing this policy.

Vice Chairman Do specifically cited the rigid practice of imposing fines by financial authorities as an example, saying, "We will comprehensively review whether this hinders the autonomous management of financial companies and work on improvements." This means revising the practice of imposing fines on a case-by-case basis for minor issues such as failure to disclose management change reports.

He also mentioned, "To enhance the legal stability of the financial system, the suspension of review system currently in operation during new licensing and major shareholder change approvals has been criticized for ambiguous judgment criteria, so we will prepare improvement plans that can increase predictability and rationality." The suspension of review system allows the suspension of licensing and major shareholder change approval review procedures when lawsuits, investigations, or inspections are ongoing.

Vice Chairman Do added, "As we hope our financial market to have more innovation and dynamism in the new year, the government will also make efforts to improve practices along with regulatory and institutional innovation."

The meeting was held with representatives from financial research institutions such as the Korea Institute of Finance and the Korea Insurance Research Institute, as well as private economic and management consulting and research institutions including Boston Consulting Group and Hana Financial Management Research Institute.

Attendees from the financial industry included Shinhan Financial Group, KB Financial Group, Woori Bank, Busan Bank, K Bank, Carrot General Insurance, KB Insurance, Kyobo Life Insurance, Shinhan Card, Mirae Asset Capital, the Korea Federation of Savings Banks, and the National Credit Union Federation of Korea.

Boston Consulting Group identified this year's notable directions for the evolution of the financial industry as ▲ intensified domestic and international competition in businesses such as payments and remittances ▲ expansion of competition to secure global high-quality assets for profitability ▲ intensified competition among financial companies, big tech (large information and communication companies), and fintech (financial technology) companies.

Hana Financial Management Research Institute diagnosed that the overall growth, profitability, and soundness outlook of the financial sector is bleak due to the continued low-interest-rate environment and stagnant earnings.

The institute also suggested, "Since uncertainties due to the novel coronavirus disease (COVID-19) persist, it is necessary to promote financial policies aimed at stable growth and structural improvement of the financial industry."

This content was produced with the assistance of AI translation services.