New FSC chief hints at greater intervention

By Kang Seung-woo

The new chief of the nation’s financial regulator hinted Monday that government intervention and control is likely to get stronger.

Financial Services Commission (FSC) Chairman Kim Seok-dong said in his inauguration speech that the government will strengthen its presence to protect stability in the financial market.

“The government will take strict measures against whoever is found to have disrupted or distorted the financial market,” the 57-year-old said three days after his appointment.

He continued to raise his voice over the strong role of the government.

“When concerns over market failure are growing, the government will take an active role in stabilizing it as the nation’s top financial regulator,” he said.

As President Lee Myung-bak selected Kim, the former deputy finance minister, Friday to replace former FSC Chairman Chin Dong-soo, there was speculation that unlike his predecessor, Kim, who is known for his line “The state governs, therefore it exists,” was expected to preach on the government’s strong role in supervising the financial market.

And he has played up to expectations.

He seemed not to worry about criticism of his support of the government’s role.

“The government control and intervention can give confidence to the market and it will be favorable to the financial institutions, won’t it?” he asked reporters.

“Government control can be decided on depending on market conditions, but the current situation is not so good.”

As for the stalled privatization of the state-run Woori Financial Group, Kim, who has held several key posts at the finance ministry, said, “How to transfer the group into private hands is more important than when to complete it.”

Meanwhile, Strategy and Finance Minister Yoon Jeung-hyun said in his New Year’s speech that Korea will try to maintain the pace of economic recovery this year by promoting overall economic health and preparing well for future external shocks.

The nation’s top economic policymaker said the government will pursue its macroeconomic policy flexibly to stabilize prices in a bid to help ease the suffering of ordinary people.

“In the process of getting over the global crisis, it was sufficient just to swiftly respond to market developments to survive,” Yoon said. “Now it is time for us to respond one step faster than changes and make major efforts to carry out tasks for sustainable growth.”

Yoon, 64, added that the projection for the global economic growth is likely to be lower than last year and there are uncertainties including financial debt crisis in the eurozone and soaring raw material prices.

The government will make efforts to help the lower- and middle-income households, according to the minister.

“We will take preemptive measures to keep in check inflation expectations... and keep working to create more work by strengthening the recruitment infrastructure and flexible employment systems.”