Foreign Firms Asked for Joint Inroads Abroad
By Park Hyong-ki
Staff Reporter
Financial Supervisory Commission Chairman Kim Yong-duk proposed that domestic and foreign financial firms make joint investments in overseas businesses.
``I hope foreign financial firms make joint inroads into overseas markets,'' Kim said at a meeting with members of American Chambers of Commerce of Korea (AmCham).
He said foreign financial firms operating here have reaped sufficient profits so far and the time has come for them to jointly look for business opportunities abroad.
``Please, propose new cooperative models so that we can make joint investments, press ahead with mergers and acquisitions and explore joint markets,'' he said.
In regard to supervision, Kim said that regulators will make changes in regulatory and supervisory frameworks in step with the changing market environment.
``A key part of this will be a shift in oversight focus from rule-based to risk-based supervision,'' he said.
He called for financial institutions to enforce strict internal controls and regulatory compliance at the individual firm level.
Kim pledged that the regulatory body will ensure a successful implementation of the ongoing transition to risk-based supervision.
``And it is my hope that foreign financial institutions will duly take into account systemic risk considerations that affect the market in making business decisions.''
Kim said the FSC will do away with ineffective regulations so as to give financial institutions all the room and flexibility they need to develop innovative products and services and better manage business.
``Along with this, we will strive to exercise more transparent and predictable supervision,'' he said. ``In particular, we will take steps to improve business entry and exit regulations in order to reduce the licensing premium that financial service providers often command from new entrants.''
The goal here is to make it easier for new entrants to get in, and distressed ones to get out of a business area, he said.
With regard to prudential supervisory standards, accounting and corporate disclosures, regulators are embracing global benchmarks.
``For example, we are on track with our preparations for the full implementation of International Financial Reporting Standards, and we expect listed companies to comply with the new accounting standards by 2011,'' said Kim.
He said regulators will provide a level playing field for all investors but will enforce rules and regulations consistently and strictly against all unlawful conduct.