Reshuffle portends serious reforms

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Reshuffle portends serious reforms

The replacement of three economy-related ministers on Tuesday reflects President Park Geun-hye’s determination to accelerate some structural reforms, especially in the financial industry.

The appointment of Yim Jong-yong, chairman of Nonghyup Financial Group and a former economic bureaucrat, as chairman of the Financial Services Commission (FSC) is expected to help push reforms in the financial industry forward. The FSC has been criticized by the president for its resistance to change.

After the announcement, Yim outlined five of his priorities in the new post at a short press conference held at Nonghyup’s headquarters in central Seoul.

“I take the calling as my mission to complete the reform of the financial industry,” he said. “There are five tasks to do in order to make the financial industry support the nation’s economic recovery.”

He said the five priorities were ensuring an active role for financial institutions, supporting a so-called creative economy, improving the regulatory framework, establishing market order and regaining public trust.

“The financial authority should play the role of judge by encouraging autonomy and competition,” he said. “The FSC and Financial Supervisory Service need to work together to do so.”

The appointment of Yim, who is praised for recent growth at Nonghyup Financial Group through strategic acquisitions and consolidation, was cheered by the financial industry.

Yim is considered to be one of the most qualified figures to lead the financial authority. He has broad experience in handling macroeconomic policies and financial policies when he worked at the Finance Ministry and has led a private financial group.

During the Lee Myung-bak administration, Yim masterminded economic policies as director general of the Policy Bureau at the Finance Ministry.

With Yim at the helm since June 2013, Nonghyup has become an industry leader in terms of deposits, loan issuances, fund subscriptions and retirement pensions.

Nonghyup acquired Woori Investment & Securities last year, beating out a bid by KB, and made NH Investment & Securities the nation’s top securities firm.

Yim’s nomination is expected to bring about major changes in the country’s financial policies and supervisory practices.

Since Yim is experienced in running a private financial institution, he is already aware of problems in government policies and practices in supervising financial institutions.

At a discussion of financial policies held by the FSC on Feb. 3, Yim highlighted the need for aggressive deregulation, fair sanctions and consistent supervision.

“The issues of personal information management, banning conglomerates from owning financial companies and requiring real-name financial transactions should be widely discussed between the government and financial institutions,” he said.

Yim also pointed out the government’s excessive regulations on financial institutions, saying “the government should never give up deregulation for the industry.”

Yoo Il-ho, nominee to become the minister of land, infrastructure and transport, took the ministry by surprise. He was an unexpected choice, said some officials at the ministry.

The Saenuri Party lawmaker who is also an economist specializing in taxation reportedly has no experience working in the construction or housing field.

Some assume that the Land Minister must know the president’s intentions, which is why Yoo was nominated, an official who declined to be named said.

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