Foreign executives see hope in FSC chairman’s vision
Nearly 120 executives of foreign financial institutions, manufacturers and business groups, as well as diplomats to Korea attended the 2015 Korea Economic Forum hosted by Korea JoongAng Daily Thursday morning at the Westin Chosun Hotel in central Seoul. Many attended the event to get information on Financial Services Commission Chairman Yim Jong-yong’s financial market reform initiatives and their potential impact on foreign companies.
They also welcomed the paper’s new publisher Hong Jeong-do. Hong became publisher of the paper in April.
The annual economic forum celebrated its ninth year since it was established in 2007.
“I think today’s speech was forward-leaning and timely,” said Amy Jackson, president of Amcham Korea. “The chairman’s points this morning were very much in line with President Park Geun-hye’s overall deregulation initiative. He has outlined a system in the financial services area that will help the growth of a creative economy, moving from micromanagement to more self-management in a coherent and responsible manner.”
Some foreign executives said Yim’s reform initiatives were a broad brush and not so different from similar plans suggested by his predecessors.
Overall, however, many foreign executives said they saw positive changes to come in the business environment in the near future. They pointed to Yim’s emphasis on the FSC allowing financial institutions to outsource information management to overseas-based IT companies as the most impressive part of his presentation.
“For us foreign financiers, the existing regulation that limits overseas outsourcing of information management has been a difficult issue to deal with,” said Park Hyun-nam, managing director and co-branch manager of corporate banking and securities at the Deutsche Bank Seoul Branch, “But today, we are grateful to hear Yim’s remarks that he will conclude this issue by June as part of the reforms.”
Discussions over whether to allow the overseas outsourcing of Korean customers’ information started in 2013, but never reached a conclusion. European and American financial institutions wanted to efficiently manage an increased volume of financial transactions after the Korea-EU and Korea-U.S. free trade agreements went into effect.
“Many of us foreign financiers feel there are actual reforms in the financial industry,” said Park. “Expectations are high among the foreign financier community over FSC Chairman Yim and Financial Supervisory Service Governor Zhin Woong-seob.”
Lewis McDonald, vice chairman of the Australian Chamber of Commerce, said the FSC’s reform plan will encourage more foreign financiers to enter the Korean market. “It [the plan] was especially helpful at a time when Australian financial services companies are watching the Korean market with a lot of interest,” he said, “following the Australia-Korea free trade agreement that came into force last December.”
But some emphasized that liberalization can be dangerous, so regulators should make sure it sets up rules that require financial institutions to be transparent.
“Transparency and credibility of the regulatory system are very crucial,” said Paolo Caridi, head of the trade section at the EU Delegation to Korea, “and things that remain under regulation should be clearly stated.” Caridi emphasized that boosting transparency and credibility within the local regulatory system is essential to promoting international competitiveness of Korean financial institutions too.
BY KIM JI-YOON, PARK EUN-JEE [firstname.lastname@example.org]