By Park Hyong-ki
Staff Reporter
Financial Services Commission (FSC) Chairman Jun Kwang-woo said the regulatory body will not discriminate against foreign capital, but treat it equally along with domestic investments.
Speaking at an event hosted by the Korea Money and Finance Association Friday, the chief regulator said, ``No market can function without the trust of those who engage in it. So this is what we pledge to the market ― equal treatment for all domestic and foreign capital under the rule of law.''
Jun added that with trust, investors come and markets thrive. Thus, the FSC will guarantee a level playing field for every investor and market participant, while enforcing a strict market conduct.
``It is essential for the safekeeping of market order and fair play,'' he noted.
With an assurance of a free marketplace for both local and global investors, Jun, however, said the regulator will severely punish those who commit unfair practices such as accounting fraud, stock price manipulation and false public disclosure in accordance with rules and regulations.
The financial authority also reiterated the importance of strengthening risk-based supervision amid severe market turmoil on credit woes.
Jun said the FSC will continue to work closely with international financial bodies such as the Bank for International Settlements and the International Organization of Securities Commissions to adopt and implement global standards.
``From Basel II for banking and net capital ratio for securities firms to risk-based capital for insurers, we are aggressively implementing prudential risk-based controls and weaving them into a tightly-knit supervision system.''
He said such effective risk management tools and practices are a key to upgrading the financial services market and preventing another financial crisis such as that experienced in the late 1990s.
Jun downplayed concerns that the country will become a net debtor on growing short-term overseas borrowing, and that the economy is likely to be hit by another crisis.
``The situation is totally different when comparing hardship due to rising inflation with the liquidity crisis in 1997,'' Jun told reporters.
He added the current situation regarding foreign debt is not of grave concern, and the debt level is manageable.
Jun refrained from commenting about Lone Star, which is on trial for alleged stock price manipulation involving the Korea Exchange Bank's credit card unit. ``It is inappropriate to express an opinion at this point when the case has not yet been resolved,'' he said.