FSC chairman focuses on innovative growth
At the Korea Economic Forum on Wednesday, Financial Services Commission (FSC) Chairman Choi Jong-ku gave his views on the state of the economy and pointed to ways that regulations could be changed to promote innovative and inclusive growth.
Over 100 people attended the 12th annual forum, which is hosted by the Korea JoongAng Daily and was held at the Westin Chosun Hotel. Forty diplomats, including Japanese Ambassador Yasumasa Nagamine, German Ambassador Stephan Auer, European Union Ambassador Michael Reiterer and Canadian Ambassador Eric Walsh, as well as 54 executives and high-ranking officials from leading financial companies, including Woori Bank CEO Sohn Tae-seung, Nonghyup Bank President Lee Dae-hoon, Kakao Bank CEO Lee Yong-woo, American Chambers of Commerce in Korea Chairman James Kim and European Chamber of Commerce in Korea President Christoph Heider, attended the event.
The theme of this year’s forum was “Finance in Korea in a changing global economic environment.”
The forum’s keynote speaker, FSC Chairman Choi, said that financial innovation is not about creating something new, but rather about continuing to smoothly supply capital to the areas of the economy that need it most.
He also stressed that the other essential role of finance is narrowing the wealth gap, which is crucial in resolving social problems and creating a fairer society.
“[The FSC] will lead the country’s financial innovation through policies that are loyal to the principles and the basics,” said Choi during his keynote speech.
The FSC chairman stressed that the goal of innovation is stripping finance down to its essentials.
“Even if a product doesn’t even have a single splendorous decoration, people gets excited over its extreme simplicity,” Choi said. “The principle of financial innovation is finding the true essence.”
The FSC chairman said government policies will be focused on getting rid of obstacles.
“The necessary amount of capital investment should be delivered at the right time so that a single idea can lead to a start-up and that start-up growing into a unicorn company,” Choi said.
The FSC chairman noted that the Korean government is working to pass a bill this year that would temporarily lift regulations on fintech companies. The changes would become permanent if it turns out that they don’t hurt consumers.
Choi said the government will reform capital investment regulations in the financial industry by easing excessive regulations and balancing asymmetric regulations.
His comment was in response to a question from Jules Kim, the economic section unit chief from the U.S. Embassy, on the lack of flexibility in Korean regulations.
“My understanding is that many of the Korean regulatory frameworks and the law is frankly a little outdated for the fourth industrial revolution and the 21st century,” Kim said. “What is the government working on in [terms of] flexibility so that innovation can happen, so that start-ups can become these unicorns?”
The FSC chairman said that the government is also looking closely at the conditions of companies listed on the tech-heavy Kosdaq and transaction practices so that the junior market can provide investment to innovative companies.
“The Kosdaq, unlike the Kospi, is less strict, and looks at the growth potential of each company [that wishes to be listed],” Choi said.
Choi also said the government will lower barriers so that entrepreneurs with innovative ideas could participate in the market while improving the regulations to stop activities that negatively affect fair competition.
Choi also highlighted the government’s role in inclusive finance targeted at middle and lower-income households and consumers.
“Inclusive finance, which is the social responsibility of finance, is an issue for financial authorities around the world,” Choi said. “The hope that [inclusive finance] will contribute to solving social problems and creating a fair society is spreading across the world.”
Choi stressed the need for an inclusive economy to sustain Korea’s growth.
“As you well know, financial policies for low income households cannot be determined simply with market economy principles,” Choi said. “The government will be taking steps to strengthen actual support.”
This includes providing financial support customized for different age groups while helping to reduce the burden of overdue loan payments.
He also said financial companies should strip away their past practices and provide financial support where it is needed the most to create future growth engines that will contribute to the economy.
BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]
with the Korea JoongAng Daily
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