Park warns financiers about public’s lost trust

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Park warns financiers about public’s lost trust

President Park Geun-hye yesterday urged the financial industry to work to restore trust that has been bashed after a series of scandals.

“Finance is a business that runs through interpersonal networks and it is an industry in which trust is most important,” Park told financial industry representatives yesterday. “But the public’s trust in the finance industry has fallen significantly because of several incidents. The first step for the industry to regain trust would be to thoroughly protect consumers who have entrusted their money to financial institutions - based on trust.”

Park’s remarks were made at a meeting at the Blue House with representatives of major financial group chiefs, bank presidents and insurance and securities chief executives.

Financial Services Commission Chairman Shin Je-yoon and Financial Supervisory Service Gov. Choi Soo-hyun attended.

Park’s message referred to several scandals that scared off investors. Tongyang Securities, for example, issued corporate bonds and commercial paper of ailing affiliates and sold them to retail investors. When Tongyang Group, which owns Tongyang Securities, let the ailing affiliates file for court receivership in September, the investments by small investors were worthless.

More recently, KB Kookmin Bank, the country’s largest financial institution, was involved in a chain of fraud and corruption scandals, while months ago there was controversy over security at NH Nonghyup Bank.

“[Financial companies] should also make sure they are thoroughly in control in advance to prevent insolvencies,” Park said. “And if bankruptcies happen, then financial companies should quickly promote restructuring to reduce the burden on the people.”

While the meeting between Park and financial industry representatives was the first of its kind, she said that she “wanted to hear what [financial representatives] think about the government’s measures announced last month to boost competitiveness” and also to “discuss the growth direction of the financial industry and to enhance competitiveness.”

After Park became president, the government created a National Happiness Fund that provides financial support to people suffering from too much household debt.

Park said the country’s economy is showing signs of recovery, citing figures that the number of newly employed people reached over 400,000 for a fourth consecutive month and the economic growth rate has reached over 1 percent for two consecutive quarters.

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