Shin pushes bankers on added value
“We will expand the share of added value created by the financial sector to our economy to the 10 percent level in the next 10 years,” said Shin Je-yoon, chairman of the Financial Services Commission.
Shin’s remarks were made at his first meeting with chairmen of major financial institutions yesterday, including Euh Yoon-dae of KB Financial, Han Dong-woo of Shinhan Financial, Hong Ky-tack of Korea Development Bank Financial and Kim Jung-tae of Hana Financial. From Woori Financial Group, Lee Soon-woo, the president of Woori Bank who on Thursday was named as new chairman, attended the meeting, while from Nonghyup Financial Group was represented by President Shin Chung-shik.
In the mid-1990s, the ratio of added value created by the financial industry in the whole economy was in the 6 percent range and in 2005 it reached 6.9 percent. However, since mid-2000, the ratio has remained unchanged.
Shin noted that in Australia, over the same period, the financial industry’s contributions in creating added value in the economy jumped from 6.8 percent to 10.2 percent.
At the meeting, Shin dismissed concerns that the financial sector is being “treated unfairly” by the administration as it is focusing too much on broad policy matters rather than detailed measures paving the way for institutions to find new businesses. “In order to realize a creative economy based on job creation, the role of the financial sector is more important now than ever,” he said.
Shin added that the FSC will come up with a more detailed vision to boost the financial sector in the second half of this year.
The meeting comes after net profits at banks showed a significant drop in the first quarter due to the overall sluggish domestic and overseas markets and low interest rates. According to the Financial Supervisory Service data, banks’ first quarter net profits totaled 1.8 trillion won, compared to 3.3 trillion won during the January to March period last year.
Experts point to excessive regulation as a hindrance to financial institutions’ growth.
“The role of the local financial industry should be not only to support realization of a creative economy through creative finance, but also to contribute in creating quality jobs and increasing the per-capita gross domestic product,” Shin said.
By Lee Eun-joo [firstname.lastname@example.org]