FSC announces plan to relax or revise 700-plus financial regulationsThe Financial Services Commission (FSC) announced yesterday it will ease as many as 711 of 1,769 regulations suggested by the financial industry.
The move by the nation’s financial watchdog comes amid weak financial industry profitability and waning public trust in financial institutions.
The Park Geun-hye government has been pushing to loosen outdated or unnecessary regulations as part of its three-year economic innovation plan announced in February.
FSC Chairman Shin Je-yoon and financial authority officials have visited 12 major financial institutions since March to listen to complaints and identify unnecessary rules and regulations that hinder growth.
“The focus of the latest regulatory reform is to mend old regulations that undermine operations and autonomy of financial institutions,” Shin said yesterday.
One of the purposes of the deregulatory move is to make financial transactions easier for consumers and corporations.
To do that, the authority said it will introduce the so-called comprehensive asset management account system, which will enable consumers to have a single account to manage assets at as many as 15 financial institutions, ranging from banks, insurers, securities brokerages to asset management firms.
From late this year at the earliest, consumers will be able to access a handful of financial products - for example, a savings account, insurance, funds and securities - at different institutions through one integrated account, helping them manage their assets and tax benefits of each product more efficiently. Tax benefits for the integrated account will be determined by the Ministry of Strategy and Finance.
Currently, even if a consumer holds various products of one financial group, he or she is unable to manage them together, causing inconvenience and high costs.
Insurance companies will be able to sell policies at shops where consumers can visit.
At the moment, the youngest age eligible for financial aid for start-ups is 20, but the threshold will be lowered to 17. The total government loan guarantee for young entrepreneurs will be increased to 300 million won ($295,570) from the current 200 million won.
The authority also will make it easier for full-time homemakers and non-Koreans who are in the early stages of working and residing in Korea to obtain credit cards.
While cutting some slack for consumers, the FSC decided to tighten supervision on internal systems at financial institutions. When accidents occur in financial transactions of more than 1 billion won, related institutions must immediately report to the authority.
Meanwhile, the government will lower entry barriers for investment institutions by lessening requirements for operation and allow them to expand by adding new businesses with a simple registration process.
For banks, the FSC will allow sales of over-the-counter derivative products as part of efforts to integrate different sectors of the financial industry to boost efficiency. Financial groups that have separated banking and insurance businesses will be allowed to combine them and launch branches that can sell products and services in one place.
There have been calls from analysts for ditching the Korean style of keeping businesses strictly divided even in one financial group and adopting the European style of universal banking that allows banks to run securities, insurance or other related businesses.
With the latest government attempt, financial groups will be able to assign bankers to do securities business at the same time.
BY song su hyun [firstname.lastname@example.org]