FSS boosts monitoring

The country’s financial regulator said yesterday it will operate a year-round system of monitoring banks to alert them of potential risks and offer advice on preemptive measures.

The move comes in response to past criticisms that the regulator did not react quickly enough to protect savings banks two years ago.

The Financial Supervisory Service yesterday unveiled detailed measures of its oversight of commercial and savings banks with a goal of early detection and analysis of risk factors and development of timely countermeasures. The FSS, under Gov. Choi Soo-hyun, has been brainstorming innovations to the country’s financial monitoring system and has been announcing related measures since July.

According to the FSS, as part of efforts to take a closer look at banks’ overall management, officials, rather than receiving business reports from financial institutions and reviewing and analyzing them at the regulator’s headquarters in Yeouido, western Seoul, will frequently conduct on-site surveillance.

“Until now, FSS officials have lacked fieldwork on banks as they collected and reviewed data at their own offices,” said Cho Young-je, a senior deputy governor at the FSS. “From now on, however, we plan to send inspectors to financial institutions when needed to swiftly find out and understand management information such as financing activities.”

Also, the regulator said yesterday that inspectors who have been dispatched to financial institutions temporarily will be authorized to make decisions on the spot without having to wait for headquarters to approve advisory measures.

The changes in the FSS system will be made starting today.

Such efforts are not likely to ease concerns that the FSS is excessively intervening in the management of financial institutions. In response, Cho said, “Financial institutions will not be under much burden because of the changes.

“The all-year-round watch system is for the FSS to more efficiently conduct monitoring on banks. It will enable us to check risk factors of financial institutions at an early phase and help prevent the possibility of going insolvent and being involved in financial accidents.”

By lee eun-joo [angie@joongang.co.kr]