FSS chief emphasizes soundness, innovation in Singapore road show

Financial Supervisory Service Gov. Lee Bok-hyun speaks during an investor relations event held in Sinagpore on Tuesday. [FINANCIAL SUPERVISORY SERVICE]

Eased regulations and innovative technologies make Korea an attractive investment destination for foreign investors, Financial Supervisory Service (FSS) Gov. Lee Bok-hyun said at an investor relations event held in Singapore Tuesday.

Lee mentioned Korea’s sound and stable financial market, innovative financial industry with huge growth potential and active policy support from the government to boost global investment as the three pillars driving Korea's financial industry in the opening remarks of the event, which was held to promote Korea's capital market.

"While Korea may not be 100 percent free from these unsettling situations, its financial market still remains sound and stable," Lee said, referring to the expanding volatility in the global financial market following the collapse of banks in the United States and Switzerland. "Domestic banks demonstrate strong asset quality compared to pre-Covid levels, despite a small setback from heavy repayment burden due to the recent interest rate hike."

Local banks have a good level of foreign currency liquidity, which has been a key indicator to monitor Korea’s financial industry since the Asian financial crisis. He added domestic securities and insurance companies also display sound capital adequacy and liquidity levels.

The FSS “plans to repeal the registration requirement to improve foreign investor access to the Korean capital markets and to support the operation of stewardship codes to have better corporate governance in place,” Lee said when asked about policy priorities for improving Korea’s financial market.

"We're closely monitoring each project site and encouraging the lender group to normalize their businesses on their own where it's possible," Lee added when asked about how the authorities are addressing the real estate project financing market.

Korea's household debt level increased dramatically during the pandemic, but the growth slowed this year and the delinquency rate of household stabilized, Lee said.

The household delinquency at the five largest banks — KB, Shinhan, Hana, Woori and NH — in April stood at 677.5 trillion won ($514 billion), down 3.3 trillion won on month.

"For the sustainability of the financial industry, we will continue to support financial companies in revenue base diversification, overseas expansion and corporate governance improvement," Lee said.

The FSS governor on Monday met with Sethaput Suthiwartnarueput, governor of the Bank of Thailand. In their meeting, he shared Korea’s experience and best practices in allowing internet-only banks to enter the financial market, which Thailand is considering. Lee also requested Thailand’s central bank to welcome Korean fintech firms looking to enter the Thai market.

Lee is scheduled to meet with Ho Hern Shin, deputy managing director at the Monetary Authority of Singapore, on Wednesday to discuss ways to increase fintech firm growth in Singapore and share ideas on how to strengthen Korea-Singapore ties in finance.

The top financial supervisor will also meet with Mahendra Siregar, chairman of the Indonesian Financial Services Authority on Friday to seek mutual cooperation with a personnel exchange program between Korea and the archipelago country.

BY SOHN DONG-JOO [sohn.dongjoo@joongang.co.kr]