FSS chief vows to be more proactive, less reactive

Finance

Published: 03 Nov. 2021, 18:47 Updated: 03 Nov. 2021, 19:13

FSS chief vows to be more proactive, less reactive

From left, Kim Tae-oh, CEO of DGB Financial Group; Kim Ki-hong, chairman of JB Financial Group; Kim Jung-tai, chairman of Hana Financial Group; Jeong Eun-bo, governor of Financial Supervisory Service; Yoon Jong-kyoo, chairman of KB Financial Group; Son Tae-seung; chairman of Woori Financial Group; Son Byung-hwan, chairman of NongHyup Financial Group; and Kim Ji-wan, chairman of BNK Financial Group pose after a meeting Wednesday in Jung District, central Seoul. [FINANCIAL SUPERVISORY SERVICE]

Financial Supervisory Service (FSS) Governor Jeong Eun-bo said his institution will focus on preventing financial disasters rather than handing out penalties after them during his first meeting with heads of major financial groups Wednesday.

Over the past year, the FSS has been penalizing banks and brokerages for selling high-risk funds, including derivative-linked funds and funds by Lime Asset Management, without adequately informing customers of their dangers.

"We will reform our monitoring system to make it more advanced and balanced," Jeong said in the meeting, "focusing on catching signs of risks before accidents take place and being more flexible toward a changing financial market environment."

Jeong added that he will expand communication channels with financial companies while the FSS investigates a case.

He acknowledged that while local financial groups have been growing at a fast pace, the size of their assets and global competitiveness still lags behind multinational financial groups, and proposed some support plans.

"We will find ways to make it easier for group affiliates to share customer information based on customers' consent to help companies within the group create synergies," Jeong said. "We will also look into improving the liquidity coverage ratio for banks so they don't have to hold excessive amounts of liquid assets."

He said he also hoped to boost the listed real estate investment trust market.

As the coronavirus pandemic and rising commodity prices put pressure on the country's economy, Jeong asked financial groups to come up with risk management plans, so they can be ready for potential crises.

Heads of seven financial groups participated in the meeting including Yoon Jong-kyoo, chairman of KB Financial Group, Kim Jung-tai, chairman of Hana Financial Group, Son Byung-hwan, chairman of NongHyup Financial Group, and Son Tae-seung, chairman of Woori Financial Group.

Shinhan Financial Group Chairman Cho Yong-byoung was not at the meeting because he was invited to the 26th UN Climate Change Conference in Glasgow, Scotland.

BYKIMJEE-HEE[kim.jeehee@joongang.co.kr]