Bank Financial Supervisory Briefing... Focus on Crisis Response Capability, Governance, and Internal Control

On the afternoon of the 12th, the Financial Supervisory Service (FSS) announced that it held the '2024 Banking Sector Financial Supervision Briefing' attended by executives and employees of banks and bank holding companies, as well as representatives from the Korea Federation of Banks.

The event featured an explanation of the FSS's supervisory and inspection directions for the banking sector this year, followed by active discussions including questions and answers related to the attendees' work plans.

In his opening remarks, Park Chung-hyun, Deputy Governor of the FSS, stated that the supervisory and inspection tasks for 2024 will focus on enhancing the banking industry's crisis response capabilities and improving governance and internal controls throughout the year.

Financial Supervisory Service building in Yeouido, Seoul. Photo by Younghan Heo younghan@

He emphasized, "Despite digital transformation and rapidly changing domestic and international environments, we will strengthen banks' loss-absorbing capacity by imposing additional capital based on stress test results to maintain solid soundness. We will also continue to promote the establishment of a risk management and internal control culture in banks by firmly implementing the 'Model Practices for Banking Sector Governance' and the 'Internal Control Innovation Plan.'"

Deputy Governor Park also pointed out, "Although the banking sector has demonstrated robust stability and profitability, there has been a side where investors have not properly valued banks' worth. One of the reasons is the short-term performance-oriented organizational culture and complacency with existing financial practices, which have hindered the demonstration of sufficient long-term growth potential."

He added, "For the true value up of the banking industry, continuous and responsible innovation is necessary. By actively utilizing future technologies, we need to build innovative growth engines that enhance consumer benefits and provide diverse financial services, while securing market trust through transparent governance and the establishment of internal controls."

During the subsequent roundtable, the introduction progress of stress buffer capital and countercyclical capital buffer, scheduled for implementation this year, was explained and future operational directions were discussed. In the inspection issues meeting, the status of the implementation of the internal control innovation plan was reviewed, along with sharing this year's inspection directions and listening to difficulties faced.

The FSS stated, "We plan to actively reflect the industry's opinions and suggestions discussed at this briefing in future supervisory and inspection tasks," and added, "We will continue to create communication platforms with the banking industry and experts to carry out field-oriented and effective supervision."

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