Green New Deal, coronavirus discussed at 14th KEF
Financial Services Commission Chairman Eun Sung-soo said the finance industry will play a significant role in the Green New Deal, details of which will be announced by President Moon Jae-in on Monday.
“One of the plan is for banks to issue green bonds,” Eun said on Wednesday at the Korea Economic Forum hosted by the Korea JoongAng Daily at the Millennium Seoul Hilton in Seoul.
The Korea Economic Forum is an annual event that provides insights into government policies and the direction of Korea's financial markets and the overall economy.
This year's forum, the 14th since its start in 2007, was on the future of Korea’s financial industry in the post-Covid-19 era.
This year's forum included CEOs of the four leading Korean banks — Jin Ok-dong of Shinhan; Hur Yin of KB Kookmin; Ji Sung-kyu of Hana and Kwon Kwang-seok of Woori — as well as Toss CEO Lee Seung-gun, K bank CEO Lee Mun-whan, Amcham chairman James Kim as well as delegates from 30 foreign embassies including India's ambassador Sripriya Ranganathan and Thailand's envoy Rommanee Kananurak.
Eun's comment on the Green New Deal was in response to a question by the European Union ambassador to Korea, Michael Reiterer, on green investment.
The FSC chairman said there will be several projects in the Green New Deal led by other government departments, including the Land Ministry and the Environment Ministry.
“Some of these projects will be funded by the government,” Eun said. “But others will be financed by [private] financial institutions.”
Noting that the Korean New Deal announced by the Moon administration is composed of three parts — digital infrastructure development projects, green industry growth and supporting employment — Eun said the emphasis so far has been on digital.
“[But] the government also understands the importance of the Green New Deal,” Eun said.
On Wednesday, the Blue House announced that Moon will be personally announcing details of the Korean New Deal July 13.
During the forum, the FSC chairman also noted the inevitability of changes that will be forced on the financial industry by the coronavirus pandemic.
“[Contactless, or 'untact,' innovation] is an unavoidable trend,” Eun said. “People no longer go to [offline] branches. They use mobile platforms at home [to conduct their financial affairs].
“[And] the pandemic will accelerate cooperation [between existing financial institutions and ICT companies] in creating new and innovative untact businesses.”
Eun noted that big tech companies like Naver and Apple are growing fast, and showing strong interest in expanding into financial services.
He said the biggest challenge is how to create cooperation between two different types of business — the existing finance industry and ICT — while minimizing any negative impacts.
He also mentioned the challenge of regulation of new businesses that will result from the convergences.
Another challenge is the protection of customer information at a time of rapid innovation.
“On one hand we’re trying to raise innovations in financial services, which I mentioned in terms of the regulatory sandbox, which contributes to creating new and creative businesses,” Eun said. “But on the other hand, [the question is] how to protect private information?"
The FSC chairman also said there was a need to divert liquidity from the government's aggressive fiscal and monetary policies to combat the coronavirus crisis into innovative sectors rather than allowing it to merely raise asset values in real estate speculation.
“We will try to turn the flow of funds into more productive sectors through venture capital investment,” Eun said.
“The financial authority will work closely with other ministries in nurturing and supporting innovative companies through government support programs,” Eun said. “That’s our goal and plan.”
This year, the Korea Economic Forum held a second session in which Vice Health Minister Kim Gang-lip outlined Korea’s strategy for containing the spread of the coronavirus, including its successful mass-testing and contact tracing.
The Vice Health Minister said one of the important factors in the government effort was transparency.
Kim said with information traveling fast in Korea, it was important to give information that was accurate and transparent.
BY LEE HO-JEONG [firstname.lastname@example.org]
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