Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
FSC chair aims to foster 'BTS of the financial industry'
Financial Services Commission (FSC) Chairman Kim Joo-hyun, left, speaks next to Financial Supervisory Service (FSS) Governor Lee Bok-hyun during a regulatory reform meeting held at the Korea Federation of Banks in central Seoul, Tuesday. Yonhap
By Anna J. Park
FSC chief hints at revising long-held act mandating separation of industrial and financial capital
By Anna J. Park
The country's top regulator once again stressed the need for innovative deregulation of the local financial industry, in order to respond nimbly to the global financial transformation towards full-blown digitalization. Such deregulation would create a new field where leading players like BTS can be born in the financial industry, he added.
Speaking at a regulatory reform meeting held at the Korea Federation of Banks in central Seoul Tuesday morning, Financial Services Commission (FSC) Chairman Kim Joo-hyun said that the local financial industry faces an important juncture where existing financial rules do not apply anymore.
“With the acceleration of the Fourth Industrial Revolution and digital transformation, the boundaries among industries are now being blurred. As the landscape of financial businesses is fast changing with new players' participation, such as that of fintech and big-tech firms, the local financial industry needs to undergo a complete transformation,” FSC Chair Kim said during the meeting.
“The goal of financial deregulation is to create a new field, which allows the emergence of global financial leading players, just like a (K-pop group) BTS of the financial industry,” he added.
It is not the first time that FSC Chairman Kim has spoken about the possible deregulation of the financial legal framework. In 2008, when he was a director at the financial authority, he also talked about it.
Back then, he drew up deregulatory measures that he said would “somewhat flexibly adjust” the country's long-held legal principle of the separation of industrial and financial capital, enshrined in the Banking Act, which restricts financial companies from owning non-financial firms as well as non-financial companies from owning banks.
The separation of industrial and financial capital was first introduced in the Korean legal system in 1961. The legal principle is aimed at protecting banks and financial institutions from being the private coffers of big industrial groups. Yet, some argue that the legal principle has hindered the banking industry's additional growth amid advances in digital technology.
Following his past footsteps, Kim has been vocal about his drive to deregulate, including revising the legal principle, if necessary, since being nominated as the FSC chief months ago.
Financial Services Commission (FSC) Chairman Kim Joo-hyun speaks during a regulatory reform meeting held at the Korea Federation of Banks in central Seoul, Tuesday. Yonhap
“Loosening up the separation rule itself is not the goal. Rather, it's more about the financial authority's willingness to touch upon the rule, if necessary, and if the rule becomes an obstacle to financial companies' or big-tech firms' innovative attempts to expand their financial businesses,” FSC Chairman Kim clarified his intention, as he spoke to reporters following Tuesday morning's meeting.
With this goal in mind, the top financial regulator plans fully to support the digital innovation of local financial companies by taking what he says are the necessary deregulatory moves.
“The financial authority will thoroughly review the existing legal system and customs, and no rule should remain an inviolable sanctuary,” the FSC chief reiterated during the meeting. “Financial industries need to develop as a core axis of the dynamic economy, and no financial regulation should hamper growth,” he added.
The second regulatory reform meeting will be held in August for the speedy implementation of deregulatory moves.