FSS prepares stronger measures to prevent banking crimes
Financial Supervisory Service Governor Lee Bok-hyun speaks during a parliamentary committee meeting held at the National Assembly in Seoul on July 28. Yonhap
By Anna J. Park
The Financial Supervisory Service (FSS) is currently drawing up measures that will toughen up banks' preventive efforts to detect early any signs of irregularities. The move is in response to a series of recent banking crimes, including several high-profile embezzlement cases involving bank employees.
The FSS submitted documents to the Assembly's National Policy Committee saying it is working on a set of measures to enhance local banks' internal controls.
In order to devise effective measures, the FSS, local banks' compliance officers as well as the Korea Federation of Banks formed a taskforce team to discuss the matter together. The final set of measures for strengthening banks' internal controls to prevent financial crimes is slated to be announced in October, following consultation with the Financial Services Commission (FSC).
“After holding a total of six meetings of the joint taskforce team, the final comprehensive set of measures will be announced in October,” an FSS official said, adding that the financial watchdog will also be collecting financial companies' opinions.
One of the specific measures being considered is expanding the implementation of compulsory vacation for bank employees. Banks can look into the employees' work-related transactions during the vacation period, so that the firms can detect any abnormalities in them.
The FSS chief has also highlighted the need to strengthen banks' internal controls, as it is one of the key factors that could contribute to curbing employees' criminal intent in the first place.
“It is necessary that local banks be alerted to the laxity in their efforts to prepare effective internal controls,” FSS Governor Lee bok-hyun said during a National Policy Committee meeting last Thursday.
Furthermore, the FSS plans to push forward revising the Act on Corporate Governance of Financial Companies, aiming to strengthen key management officials' responsibility regarding financial crimes. The financial regulator will also expand on-site inspections of bank branches, while banks are advised to bolster their compliance departments.