Chief financial regulator eyes reform for consumer protection
By Park Hyong-ki
Financial Supervisory Service Governor Choe Heung-sik / Yonhap
Korea’s new financial regulator has vowed to establish a new system enabling a stronger protection for low-income consumers, and preemptively spotting companies suspected of accounting fraud.
In his inaugural speech on Monday, Financial Supervisory Service (FSS) Governor Choe Heung-sik stressed fairness and transparency in the financial industry, foretelling a sweeping reform in line with President Moon Jae-in’s pledge for stronger disciplinary measures against malpractices.
“We will set up a committee on consumer protection directly under the governor’s office,” he said.
The committee will consist of experts from academia, civic groups and the media that can independently assess any wrongdoings including negligent sales of financial products.
He told the press that the committee is not intended to block the establishment of a center on consumer protection, but part of a process toward it.
The FSS chief added he will not go beyond its regulatory jurisdiction and be in conflict with the Financial Services Commission (FSC), financial companies and personnel with whom he had relations.
As a former executive of Hana Financial Group, Choe has a longstanding relationship with the banking holdings company.
He is the FSS’ first chief from the private sector.
This is raising both hopes and concerns. President Moon seeks reform in commerce and finance, as well as other sectors, including the army, police and prosecution, by having outsiders leading his initiative.
The union of Hana Financial raised concerns over his relationship with the banking group, including its former Chairman Kim Seung-yu.
“The only way to allay this concern is Governor Choe implement harsh disciplinary measures against Hana Financial,” it said, noting Hana’s illegal loans to Choi Soon-sil, a close associate of ousted former President Park Geun-hye.
Choe also went to the same high school with Jang Ha-sung, the presidential chief of staff for policy.
“I have not discussed anything special (with Jang before or after my appointment),” Choe told the press. “The FSS will not extend its authority under the law,” he added.
Besides having a stricter regulatory system against accounting fraud, the new governor said the FSS will have companies disclose information on how much they have contributed to improving the environment and resolving labor-management tension.