Financial regulator moves to step up oversightIn June, a group of criminals with the help of a bank employee managed to forge a 10 billion won ($8.9 million) check by getting hold of a blank certified check and printing an actual account number on it before withdrawing the amount in cash. According to police, the crime was so meticulously planned that it was nearly impossible for the bank to notice.
As part of efforts to intensify internal monitoring at financial institutions, the country’s financial regulator yesterday announced comprehensive measures to prevent financial crimes. Measures include holding top executives accountable to create greater awareness and security as well as early involvement of the Financial Supervisory Service.
According to the FSS yesterday, although the number of cases of financial crimes declined slightly last year to 184 from 190 in 2010, there still have been several recent incidents of fraud involving large sums of money.
Based on law, financial crime refers to any illegal activity either by an institution or its employees that causes losses to customers.
“This year, there have been cases of large financial crimes involving more than 10 billion won,” said an official from the FSS. “We plan to conduct thorough regular inspections on financial institutions’ internal monitoring practices.”
According to the FSS, when the regulator does a management inspection on banks, 16 percent of its check sheet is on internal monitoring along with other criteria such as cybersecurity. The percentage, however, will increase to 25 percent from today to raise banks’ alertness to possible criminal activity.
Also, top executives at financial institutions will be given more responsibility; lower-level management like branch heads were the ones mainly responsible for crimes.
“The level of punishment for management executives will differ case by case,” the official said. “But the executives’ various efforts to prevent financial accidents will be reflected in their yearly evaluations.”
Meanwhile, the FSS will advise financial institutions to hold a workshop once a year targeting top management on boosting internal monitoring.
It will also sign a memorandum of understanding with institutions where there is an excess of financial crime.
By Lee eun-joo [firstname.lastname@example.org]