Lee Bok-hyun: "Domestic Internet Banks Different from SVB... Surprised by Strong Response to Small Livelihood Loans"

"Low Bond Proportion and Short-Term Bonds Focused"
Indicates Strengthening of Bank Closure Procedures
"Institutional Measures for Governance to Be Announced Soon"

On the 30th, Lee Bok-hyun, Governor of the Financial Supervisory Service, who attended the opening ceremony of Woori Bank Senior Plus Branch No. 2, is surrounded by reporters answering questions. Photo by Heo Young-han younghan@

Lee Bok-hyun, Governor of the Financial Supervisory Service, dismissed concerns about the crisis of domestic internet-only banks such as Toss Bank, which arose following the Silicon Valley Bank (SVB) incident on the 30th.

After attending the opening ceremony of Woori Bank’s ‘Yeongdeungpo Senior Plus Branch’ held in Yeongdeungpo-gu, Seoul, Governor Lee told reporters, “Unlike SVB, domestic internet banks have a small proportion of bonds, and most securities are composed mainly of short-term bonds, so the price fluctuation risk is not that significant.” He added, “From a lending perspective, the proportion of household loans covered by deposit insurance is large, so they are relatively more sophisticated compared to foreign cases.”

Regarding the asset soundness of domestic financial institutions, he said it is at a “manageable level,” but explained, “We are monitoring and preparing programs related to real estate project financing (PF) issues, especially focusing on bridge loans.”

Woori Bank's Senior Plus Branch No. 2, designed for seniors unfamiliar with internet and mobile financial transactions, has opened in Yeongdeungpo, Seoul. Lee Bok-hyun, Governor of the Financial Supervisory Service (second from right), and Lim Jong-ryong, Chairman of Woori Financial Group (second from left), along with other attendees, are cutting the ribbon with representatives of the branch's customers. Photo by Heo Younghan younghan@

He also reiterated the social responsibility of banks. Concerning the accelerated closure of bank branches in recent years, Governor Lee expressed concern, saying, “If branches are closed too rapidly and solely for short-term cost savings, secondary damages such as reduced financial accessibility for consumers may occur.” He noted, “Currently, there is no control measure for branch closures through licensing, and the system is designed to review appropriateness afterward. There are questions about what evaluations recent branch closures have undergone.” He suggested strengthening closure procedures by stating, “We will review several years’ worth of data and establish standards that the public can accept.”

Regarding the small livelihood loans that started on the 27th, he said, “I was surprised by the enthusiastic response,” and mentioned, “I believe financial institutions can prepare additional support activities similar to small livelihood loans.”

On the mass reappointment of outside directors at the four major financial holding companies, he said, “It is a matter of principles and procedures regarding how outside directors should be composed,” and added, “I think it is desirable for shareholders with direct interests to have their opinions reflected during the recommendation process.” He further stated, “The Financial Supervisory Service is discussing institutional measures to support efforts tailored to each company’s circumstances internally and will announce them soon.”

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