Financial Authorities' Audit Starts Tomorrow... 'Household Debt and Cryptocurrency' Expected to Be Key Issues

National Assembly Political Affairs Committee Audit from the 6th to the 21st

[Asia Economy Reporter Kim Jin-ho] The '2021 National Assembly Audit' of financial authorities including the Financial Services Commission and the Financial Supervisory Service will begin tomorrow. This year's audit is expected to focus on key issues such as household debt exceeding 1,800 trillion won and the responsibility of financial authorities related to the wave of closures among cryptocurrency exchanges.

According to the financial sector on the 5th, the National Assembly's Political Affairs Committee will start the audit with the Financial Services Commission on the 6th. On the 7th, the Financial Supervisory Service will be audited, followed by the Korea Credit Guarantee Fund, Korea Development Bank, and Industrial Bank of Korea on the 15th, and the Korea Deposit Insurance Corporation on the 18th. A comprehensive audit is scheduled for the 21st.

The undeniable hot topic of this year's audit is household debt. Despite the government's successive regulatory measures, household debt has surpassed 1,800 trillion won, becoming the biggest risk factor for the Korean economy. In particular, the Bank of Korea has emphasized the need to normalize monetary policy, raising concerns about potential defaults higher than ever before.

Accordingly, lawmakers from both ruling and opposition parties are expected to focus their scrutiny on the heads of the two financial authorities regarding solutions to household debt. Especially since the Financial Services Commission emphasized last year during the audit that "household debt is at a manageable level," strong criticism toward Financial Services Commission Chairman Go Seung-beom is anticipated.

Explanations regarding various controversies related to loan regulations aimed at curbing household debt are also expected to be demanded. Recently, the financial authorities have been considering even regulating jeonse (long-term deposit) loans, raising concerns about damage to genuine borrowers. Additional household loan regulation measures may be revealed through Chairman Go Seung-beom's responses.

The controversy over inadequate management and supervision of cryptocurrency exchanges is also expected to be a major issue. Both ruling and opposition parties have emphasized the responsibility of financial authorities for the significant market turmoil that began in the first half of this year. However, since last month, the failure of cryptocurrency exchanges to meet the reporting deadline under the Act on Reporting and Using Specified Financial Transaction Information has led to a wave of closures, so strong criticism is expected to continue.

According to the results of the DLF (Derivative Linked Fund) lawsuit, the responsibility of financial authorities is also expected to be re-highlighted. While last year's audit saw lawmakers targeting financial companies, this year the Financial Services Commission and the Financial Supervisory Service are expected to be the main targets. In particular, lawmakers are expected to focus their inquiries on the Financial Supervisory Service's disciplinary practices against financial companies.

Additionally, big tech issues will be raised as major points of contention. Controversies over big tech companies infringing on small business districts and preferential treatment regarding the separation of banking and commerce are expected to be discussed. The Merge Point incident, which caused a large-scale refund chaos, will also be a topic. Lawmakers point out that lax management and supervision of unregistered prepaid service providers like Merge Point have increased damage to consumers and small business owners. Therefore, measures to address prepaid electronic payment service providers, who are in a blind spot of financial authorities' oversight, are expected to be demanded.

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