FSS to probe fewer companies
The FSS watches over the country’s financial institutions such as commercial banks, savings banks and insurance companies. The authority can inspect questionable transactions or mistakes made by the institutions and impose penalties.
The authority announced it will halve the number of investigations it makes into the financial entities in order to minimize its intervention in their management.
In the wake of the internal feud at KB Financial Group, the authority was criticized for meddling in the group’s internal matters.
According to the FSS reform plan, the watchdog will reduce its customary investigations by more than 50 percent. The FSS conducts 45 investigations per year and checks on each of the 3,600 financial institutions once every two to three years.
Starting now, the FSS will limit its investigations to 20 per year and will focus on unstable companies.
The watchdog has also been criticized as inefficient because it investigates all businesses within an institution for no particular purpose every two to three years. It said it will stop that practice and instead focus on matters that affect customers’ rights like personal data leaks or illegal sales of financial products.
“We collect information about financial institutions during the processes of approving financial products, arbitrating disputes or resolving consumers’ complaints,” said Kwon In-won, deputy governor of the FSS. “Based on that information, the FSS will keep watching them, but will launch investigations only when situations are serious enough to threaten the institutions’ soundness.”
The FSS also decided not to punish financial institution employees that give loans to start-ups with weak financial health, which is considered bad debt. Allowing more loans to small companies is part of the authority’s contribution to the government’s creative economy initiative.
The FSS said it will pay more attention to large financial transactions of more than 5 billion won ($4.8 million).
If a company repeatedly violates financial regulations, the FSS said it will create guidelines which it will distribute to those companies so that they can correct the problem themselves.
The FSS Sanctions Review Committee will also be reformed. The nine-member group that advises the FSS governor on punishments was criticized for creating confusion over the KB case.
The committee advised Governor Choi Soo-hyun to give a light warning to KB Chairman Lim Young-rok and Kookmin Bank CEO Lee Kun-ho, but Choi rejected their recommendation and raised the punishment level. During the process, the FSS was scolded by the general public and press for changing its mind. It was the first time the governor didn’t listen to the committee.
The Korea Institute of Finance yesterday released a survey that said more than 63 percent of consumers view the authority’s supervision methods negatively. About 54 percent of them said they don’t think the authority is working to protect consumers’ rights.
The FSS was established in 1999 by combining four supervisory bodies - the Banking Supervisory Authority, Securities Supervisory Board, Insurance Supervisory Board and Non-bank Supervisory Authority.
BY SONG SU-HYUN [email@example.com]
More in Finance
Loans to self-employed grow at slower pace in third quarter
Credit card payments in Korea rise in October on year
Kospi breaks record for second day in a row
Flush banks ditching employees ASAP