Financial Authorities Discuss Improvement Measures for Suspension System of Financial Business Licensing Reviews

Discussion on Major Financial Sector Issues Including Household Debt Status
Request to Review Financial Support Measures to Strengthen Housing Ladder for Non-Homeowners and Low-Income Citizens

[Asia Economy Reporter Park Sun-mi] Financial authorities are considering various measures to harmonize the legal stability of the financial business licensing system with the predictability for applicants.

On the 14th, the Financial Services Commission announced that it held the 2nd meeting of the Policy and Global Finance Subcommittee of the Financial Development Council the previous day to discuss major financial sector issues, including the draft improvement plan for the financial sector's licensing and approval suspension system that can harmoniously enhance legal stability and applicant predictability, as well as household debt management measures.

A report was given on the measures under review to rationally improve the financial business licensing and approval suspension system. The licensing suspension system is a system that allows the suspension of the review process by excluding the period from the review period when it is recognized that ongoing lawsuits, investigations, or inspections during the review of new financial business licenses or major shareholder change approvals may significantly affect the review.

The suspension system has been introduced and operated with the purpose of enhancing legal stability related to licensing by withholding approval or licensing to disqualified persons under financial law. However, when lawsuits, investigations, or inspections are ongoing, financial authorities find it difficult to predict the results, causing the review to be effectively delayed indefinitely, leading to the need for improvement in system operation.

At the meeting, the following were reported: ▲ a plan to specify the criteria for suspension judgments by reason to enhance consistency and predictability in legal application, ▲ a plan to mandate periodic reviews of whether to resume the review to prevent prolonged suspension periods, ▲ and a plan to conduct the review based only on the facts revealed at a certain period after the suspension.

Accordingly, members of the Financial Development Council expressed agreement on the need to improve the suspension system and the government's policy direction. In particular, many members agreed with the direction of specifying judgment criteria step-by-step to enhance applicant predictability and urged the preparation of a final plan that balances and harmonizes the rights of applicants with those of the financial market and consumers. They also pointed out that for the improvement plan to operate efficiently in the field, it is necessary to fully consider the actual system operation and policy enforcement process when preparing the measures.

The meeting also discussed major financial sector issues such as the current status of household debt. Many members urged thorough macro-level responses such as total volume management, given the increasing trend of household debt since COVID-19, and balanced consideration of financial support measures to strengthen the housing ladder for non-homeowners, low-income, and youth groups.

Shim In-sook, Chairperson of the Financial Development Council, emphasized, "We must manage the increase rate of household debt stably so that it does not become a burden on our economy, while paying attention to whether excessively rigid regulations cause unreasonable situations."

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