‘Troubleshooter’ tries to spread confidence in banks

Kim Seok-dong

Mokpo, South Jeolla - A man widely known by the nickname “Troubleshooter” stood in a queue with other passengers yesterday morning, waiting to board an airplane to Gwangju, South Jeolla.

It was none other than Kim Seok-dong, chairman of the Financial Services Commission, who was embarking on his second day of a trip to personally check out regions with suspended savings banks following a visit to Busan on Monday. The man looked a bit exhausted from all the travel. However, his firm willingness to resolve the recent crisis in the savings bank sector was obvious as he carefully listened to what heads of savings banks in the South Jeolla region had to say.

Kim gained his nickname thanks to his problem-solving ability during the credit card crisis of 2003 when he was in charge of the Ministry of Finance’s task force, and for his handling of real estate policy reform in 1995 and financial regulation reform in 1997.

But beyond his problem-solving ability, Kim is famous for using his authority to control the market.

And he hasn’t hesitated to use his powers to restructure the insolvent savings bank sector, which was at the top of his agenda as head financial regulator.

However, Kim’s ambition to restructure the savings bank industry has been marked by a misstep. After he suspended two affiliates of a Busan savings bank group, he vowed to suspend no more savings banks on the condition that excessive bank runs didn’t occur. Then depositors withdrew massive amount of money over the past four business days and Kim suspended four more savings banks. Since then, depositors have been losing faith in both the banks and the financial regulator.

Kim said he cannot understand why depositors are losing faith and partly blamed the media.

“We have done everything we can,” Kim told reporters after a meeting with officials and heads of savings banks in the South Jeolla region at the Mokpo Chamber of Commerce & Industry yesterday.

“Trust is not something that can be built up on one side,” he said. “Depositors have to trust us too ... The government has to act in a way that builds depositors’ trust in us, but depositors also have to have faith in us and what we are doing. And in the middle, the media needs to play a key role that bridges the two sides with trust.”

He then asked, “Why does the government have to hear from people that they’ve been deceived by us (the government)?”

Kim also strongly complained about the management and major shareholders of savings banks.

“This recent crisis is something that the management and major shareholders of savings banks have to be held responsible for,” he said. “And now the government is carrying the can for them.” Kim ended his hectic day at Mokpo after a luncheon with reporters and headed back to Seoul at 2 p.m. to take care of the crisis from the capital.

“I am not going anywhere tomorrow,” said Kim, explaining how exhausted he was from handling the recent crisis in the savings bank sector and traveling so much.

Kim said he was confident that the recent chaos in the savings bank sector is almost over.

However, some analysts believe that the industry should be watched carefully for at least the next few days, although withdrawals were significantly reduced yesterday from the day before.

By Jung Jae-yoon [jyj222@joongang.co.kr]