New FSC chairman will focus on capital markets

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New FSC chairman will focus on capital markets

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Yim Jong-yong

Korea’s top financial regulator will try to shift the center of the nation’s financial industry from the banking sector to the relatively weaker capital markets as part of a long-term restructuring plan.

Yim Jong-yong, the new chairman of the Financial Services Commission (FSC), said at his first press conference Tuesday that he believes capital markets should be the heart of the financial industry.

“My interest is mainly in the capital markets,” Yim said. “To boost and enhance the market will be the future of our financial industry.”

The new FSC chairman outlined a long-term goal in three specific areas.

“The Kospi, Kosdaq and Konex will be restructured in a way that each trading board functions in accordance with its own characteristics,” he said.

But the chairman emphasized that the regulator will not seek an artificial separation of the Kospi and Kosdaq, which has been rumored.

“The benchmark Kospi needs to play a role as a field for large-cap shares, while the Kosdaq should be enhanced as a stepping stone for smaller companies to grow,” Yim said. “The Konex will have to be a field that fosters the growth of start-ups.”

Yim, the former chairman of Nonghyup Financial Group, the fourth largest financial group in the country, said he had worked with the securities market for three years, so his personal interest was more in the capital market.

The chairman also pledged to improve private equity funds to develop them to a level seen in advanced countries.

“Private equity funds and venture capital are going to play important roles in the capital markets,” he said.

Another reason that Yim favors the capital markets is that he believes they can contribute to realizing the creative economy initiative of the Park Geun-hye administration, which aims to encourage start-ups. He plans various measures to help start-ups get financing.

“Technology finance,” which was promoted by his predecessor Shin Je-yoon, will remain one of six major tasks of the FSC under the new chairman.

“Technology finance has the purpose of changing banks’ conservative policies in issuing loans to start-ups,” he said. “Technology finance will become a source of investment for start-ups,” the chairman said.

The FSC will embark on an investigation into current practices regarding loan issuances to start-ups and how many are benefiting from the government initiative.

As for reforming the supervisory function of the financial authorities, Yim announced the authority will stop punishing individuals at financial institutions, and wrongdoings of individual employees and executives will be considered those of the institutions. But excessive punishment for institutions will not be sought, he said.

“As I have repeated several times, the FSC will play the role of referee, not coach,” he said.

“Together with our partner, the Financial Supervisory Service (FSS), financial authorities’ supervision will be improved in a way that promotes the autonomy of institutions.”

There have been complaints in the financial industry about dual regulations and punishments by the FSC and FSS as the organizations have been distant from each other.

To address those complaints, Yim and senior officials from the FSC will visit the FSS at least twice a week.

BY SONG SU-HYUN [song.suhyun@joongang.co.kr]

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