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Regulator vows to crack down on shady loans at Korea's big banks in 2025

Published: 10 Feb. 2025, 18:54

SHIN HA-NEE
[email protected]

Financial Supervisory Service (FSS) Gov. Lee Bok-hyun speaks during a press conference at the FSS headquarter in western Seoul on Feb. 10. [NEWS1]

Korea’s chief financial regulator vowed to “level the playing field” for consumers with a “zero-tolerance” policy for unfair practices on Monday.

“As the protector of Korean people’s assets, we will level the playing field,” said Financial Supervisory Service (FSS) Gov. Lee Bok-hyun in his opening remarks during a New Year's news conference in western Seoul.

“We will take a hard line on illegal practices […] in the financial market, which is inherently asymmetrical in information, with a zero-tolerance approach,” said Lee, “while also addressing the fundamental causes, such as corporate culture prioritizing only short-term performance, faulty internal control systems and a lack of ethics.”

The comment came after the FSS announced on Feb. 3 that it had uncovered 482 cases of improper loan provisions worth 387.5 billion won ($266.9 million) by three banks: Woori, KB Kookmin and NH Nonghyup.

Addressing a question regarding the FSS’s plan to prevent unfair practices, the governor pointed out that “after significant growth in size, domestic financial firms say that they are competing with global firms, but we fall behind in some aspects such as organizational operations and risk management.

“Financial firms must reflect on whether they've achieved qualitative growth alongside quantitative growth — and so should financial authorities.”

Lee also promised that FSS would remain vigilant amid persistent political and economic uncertainty.

“As uncertainties across all areas, including politics and economy, are expected to increase this year, we cannot rule out the possibility of an unexpected financial crisis,” Lee said.

“FSS will remain more vigilant than ever to keep the financial market system stable.”

BY SHIN HA-NEE [[email protected]]