Financial Microscope

Insurance companies have issued approximately 9 trillion won in capital securities this year, surpassing last year's all-time record. This surge is attributed to heightened efforts to manage financial soundness, prompted by interest rate cuts and accounting-related regulations. Experts advise that relying solely on capital securities for financial soundness has its limitations and recommend adopting strategies to diversify risks. Capital Securities Issuance Surpasses 9 Trillion Won... All-Time HighAccording to the Korea Securities Depository and the Financial Supervisory Service as of November 4, domestic insurance companies have issued 8.837 trillion won in capital securities (including subordinated foreign currency bonds) so far this year. This not only marks the highest amount ever but also exceeds last year’s total issuance of 8.665 trillion won. Including Heungkuk Life Insurance’s planned issuance of 200 billion won in subordinated bonds later this month, the total capital securit

Person A purchased an ultra-high-end residence in Manhattan, New York, worth 10 million dollars (approximately 14 billion won), with the intention of moving assets overseas. Person A installed a personal wallet application on their mobile phone and created a personal wallet. Afterwards, Person A met an unregistered currency exchange broker in person and received 10 million dollars worth of the stablecoin Tether (USDT) into their personal (non-custodial) wallet, handing over slush funds (Korean won in cash) accumulated over several years. To evade tracking by authorities, Person A transferred the USDT to an exchange in an emerging market with weak Know Your Customer (KYC) procedures, and then withdrew it again to another personal wallet. Person A plans to keep the USDT in a personal wallet and, after immigrating to the United States in the future, launder 2 million dollars worth of USDT into legitimate dollars to use for purchasing a home and covering living expenses. Person B illegally

#Lee Junghoon (37, pseudonym), an office worker at a major corporation, is currently looking into mortgage loans from secondary financial institutions. Lee signed a contract for an apartment in Gangseo-gu, Seoul, on October 12, just before the October 15 measures were implemented. However, he now finds himself a "loan refugee" in the primary financial sector. "The loan consultant recommended a mortgage loan from an insurance company," Lee said. "I'm debating whether I should take out a loan from a secondary financial institution while it's still possible, since it's unclear when those options might also be cut off." With the government rolling out a series of loan restriction policies, a year-end credit crunch is expected. Major commercial banks have exceeded their household loan targets and are tightening lending, making it as difficult as "threading a needle" to get a mortgage from a primary financial institution. As a result, genuine homebuyers are turning to secondary financial ins

Woori Financial Group is making notable strides in the field of "productive finance." Many attribute this to the significant influence of Woori Financial Group Chairman Lim Jongryong, who previously served as Chairman of the Financial Services Commission. It is believed that his experience in considering the need to redirect capital concentrated in real estate toward key industries and the capital market has been reflected in the management of the financial holding company. Former Financial Services Commission Chairman Lim Jongryong... The Most In-Depth Understanding of Financial Authorities Among Financial Holding Company Chairmen On September 29, Lim Jongryong, Chairman of Woori Financial Group, announced that the group would invest a total of 80 trillion won across all affiliates by 2030 to promote a transition to productive finance and expand inclusive finance. At the same event, he also unveiled a plan to invest 10 trillion won in the National Growth Fund. Woori Financial Group wa

The Financial Supervisory Service has initiated a reorganization of its financial consumer protection division. This move aims to change the longstanding practice in the financial sector of providing delayed compensation after incidents occur, and instead to establish a culture of consumer protection throughout the entire process, from product design to sales. The Financial Supervisory Service plans to publicly announce the results of its financial consumer protection efforts at a national briefing in the first half of next year. Governor Personally Handles Complaints: "No Shifting of Responsibility"Lee Chanjin, Governor of the Financial Supervisory Service, met in succession with the chief executive officers of nine sectors?including banking, insurance, savings banks, financial investment, big tech (large information technology companies), credit, mutual finance, research institutes, and virtual assets?immediately after taking office on August 14, urging them to strengthen consumer pr

The popularity of group accounts initiated by KakaoBank remains strong. Even after several years, competition within the banking sector continues to intensify, with new products being launched and the scope of services expanding. This trend is attributed to the advantages of easily attracting low-cost deposits and acquiring new customers. According to the financial industry on September 10, KakaoBank's group account balances have exceeded 10 trillion won, with more than 12 million customers. This milestone was achieved seven years after launch. The balance reached 1 trillion won in less than a year, 2 trillion won in one year and eight months, and 5 trillion won in four years and two months, showing a steep growth trajectory. KakaoBank explained that the group account has continued to grow steadily, with a net increase of 2.2 trillion won last year alone. Looking at the average balance per account, it is clear that customers are actively using group accounts. The average balance incre

Tensions are rising among secondary financial institutions as the government has announced plans to amend the Education Tax Act, doubling the education tax rate from its current level. These institutions, already facing challenges of improving performance and defending financial soundness, are now confronted with an increased tax burden. Some are concerned that the resulting cost increases will ultimately be passed on to consumers. Education tax rate to rise from 0.5% to 1%... Insurers to bear an additional KRW 350 billion According to the financial sector on August 20, the Ministry of Economy and Finance recently announced the "2025 Tax Reform Plan," which includes raising the education tax rate applied to financial companies' operating revenue exceeding KRW 1 trillion from the current 0.5% to 1%. Operating revenue includes interest, dividends, fees, guarantee fees, gains from the sale of securities, insurance premiums, and more?essentially equivalent to sales in the manufacturing se

Banks are launching savings products aimed at attracting sports fans. A prime example is the "championship savings" account, which allows customers to support their favorite teams in major leagues such as the Korea Baseball Organization (KBO) and K League, while wishing for their team's victory. By offering these products exclusively through non-face-to-face channels, banks are also encouraging customers to use their own banking applications (apps). According to the financial industry on July 9, Shinhan Bank has resumed sales of 100,000 accounts of the "1982 Legendary Savings" product starting July 7. This product, which was initially launched on July 1, saw its 100,000 account limit filled within just four days. The "1982 Legendary Savings" is a high-interest savings product commemorating the bank's 43rd anniversary, allowing customers to deposit up to 300,000 won per month in a one-year maturity free savings account. The basic interest rate is 3% per annum, with a preferential rate o

Going forward, newlywed couples and households with newborns will see their maximum loan limit reduced by up to 100 million won when purchasing a home using policy-based financial products. The government announced these changes as part of the June 27 Household Debt Management Measures. The new policy not only blocks gap investment (purchasing with a jeonse lease in place), but also imposes a uniform maximum loan limit of 600 million won, regardless of the borrower's repayment capacity. This is considered a "high-intensity measure" that effectively blocks demand for high-priced homes. Let us take a look at the financial policy changes taking effect in the second half of the year. Key Points of the June 27 Measures: 'Focus on Real Demand' and 'Ban on Excessive Loans' The core of these measures is to restructure the market around real demand and to restrict excessive borrowing for home purchases. The most prominent example of the "focus on real demand" is the complete ban on additional h

The Lee Jaemyung administration's debt adjustment program (bad bank) for long-term delinquent borrowers is set to be implemented later this year. The program targets individuals who have been unable to repay loans of 50 million won or less for over seven years. The government has announced plans to either write off the debt entirely or reduce the principal by up to 80%, depending on the debtor's repayment ability. The "personal debt relief" policy began under the Roh Moo-hyun administration and has continued under subsequent administrations, each time under a different name. However, there is a growing perception that this latest program is more radical than those of previous governments. What are the reasons for this assessment? Debt Relief Rates Expanding with Each Administration Change... More Beneficiaries Than Under the Moon Administration Successive administrations have operated personal debt adjustment programs, or bad banks, at the start of their terms, despite criticism that