Kim Juhyun, Nominee for Financial Services Commission Chairman, "Maintain Household Debt Stabilization with DSR as the Standard"

"Virtual Assets, Through Industry Self-Regulation"
For Banking Innovation, "Improvement of Geumsan Separation Needed"

Image source=Yonhap News

[Asia Economy Reporter Sim Nayoung] Kim Juhyun, the nominee for Financial Services Commission chairman, stated on the 7th that "we will maintain the household debt stabilization policy based on the Debt Service Ratio (DSR)."

At a press conference held at the Credit Finance Association's main conference room on the same day, Kim said, "It is definitely right to manage household debt in a stable manner," adding, "While necessary fine adjustments will be made, I believe the household debt stabilization policy based on DSR should be maintained."

Regarding virtual asset regulation, he urged the industry to exercise self-regulation. Kim said, "I have never seen such polarized opinions among experts," and added, "I believe there is ample room for blockchain technology to be applied and developed not only in finance but across our entire economy, and we should not extinguish this spark."

He continued, "At this point, those in the virtual asset industry should show responsible behavior regarding the social issues being raised."

He also said, "We will push forward with legislation related to virtual assets as quickly as possible," but noted, "Institutionalization is not easy. The U.S. will release a report by the end of the year, but since virtual assets are traded globally, if international institutional cooperation is not achieved, unilateral legislation may be ineffective. We are preparing thoroughly internally, but final legislation may take time."

Regarding financial regulatory innovation, Kim said, "I think some basic principles like the separation of banking and commerce can be partially supplemented," and added, "We will correct the 'tilted playing field' issue raised by the banking sector."

He said, "If overseas financial companies are conducting certain businesses but Korean banks cannot, we will resolve any unjustifiable reasons," and added, "From the perspective of existing financial companies, if Big Tech is doing something that banks cannot, and there is no valid reason for this, we will lift the regulations."

This is interpreted as an intention to allow financial companies to enter other industries. The separation of banking and commerce is a principle that prohibits financial capital and industrial capital from owning or controlling each other's businesses. Financial companies have raised issues that this law restricts their non-financial ventures, preventing them from owning companies in other sectors, including IT. Banks have requested the government to improve the 'tilted playing field' issue, citing difficulties competing with Big Tech and FinTech.

Kim Kwangsoo, chairman of the Korea Federation of Banks, said before the last presidential election, "I hope that banks will be able to make investments in FinTech and lifestyle services by easing the 15% investment limit on non-financial companies, enabling banks to introduce innovative services that integrate finance and non-finance," which aligns with this context.

Kim said, "The separation of banking and commerce is a very sensitive issue; in the past, even mentioning it caused public backlash," adding, "Considering the changes in the technology industry now, it is time to review whether applying the past separation of banking and commerce is appropriate or if improvements are necessary."

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