FSC chief to overhaul banks' governance
Shin Je-yoon
By Na Jeong-ju
The new chairman of the Financial Services Commission (FSC) pledged Friday to overhaul the governance system at financial groups.
“I will create a task force including experts from academia, the financial sector and civic groups as soon as possible to discuss reforming the governance structure at financial firms,” Shin Je-yoon said in an inaugural ceremony.
“This is because many holding companies have failed to serve the original purpose of the current system ― ensuring managerial independence between affiliates and preventing the spread of risk. We must come up with measures to address this problem.”
The remarks came amid lingering controversy over an internal feud between management and the board at KB Financial Group. Shin also once said many employees at Woori Financial Group are trying to get promotions by sucking up to powerful people, instead of working hard.
“It’s time to correct the system. It’s a matter of credibility and the future of Korea’s financial industry,” Shin said.
The FSC is expected to embark on efforts to replace heads at financial firms. Early this month, Shin said the firms need new leaders who are aligned with President Park Geun-hye’s vision and philosophy.
Shin told reporters that he won’t target any specific firms. However, many people speculate that he is aiming at CEOs who were appointed under the Lee Myung-bak administration, including KB Chairman Euh Yoon-dae, Woori Chairman Lee Pal-seung and KDB Financial Group Chairman Kang Man-soo.
Shin, a former vice finance minister, was nominated to head the country’s top financial regulatory body early this month. He officially took the helm after being endorsed by the National Assembly at a confirmation hearing.
He also urged financial firms to find new growth engines in overseas markets, saying they are mostly lagging behind international firms in terms of competitiveness.
Shin said emerging Asian markets will provide them with opportunities.
“Korean firms need to focus more on Asia. We will support their expansion in the region,” Shin said.