Chief regulator again calls on banks to play pivotal role in productive finance
Financial Services Commission Chairman Lee Eog-won speaks during a meeting with reporters in Seoul, Nov. 12. Yonhap
The chief of the country's financial regulator on Monday called on banks to play a greater role in productive finance.
In a ceremony marking the launch of a preparatory body for a mega-sized public-private fund to invest in high-tech sectors, Lee Eog-weon, chairman of the Financial Services Commission (FSC), said banks need to change their lending practices by funneling more money into innovative, productive sectors.
"Banks should dramatically change their decadeslong business practices and mindsets," Lee said.
"They are still reaping massive interest income, but their roles in boosting financing for high-risk sectors are still weak," Lee said.
In September, President Lee Jae Myung announced that the country will create a 150 trillion-won ($120 billion) public-private fund, set to be launched early next month, to support investment in artificial intelligence (AI) and other advanced industries.
The so-called "Public Growth Fund," one of his key economic pledges, aims to accelerate AI adoption across sectors and channel resources into key industries, including semiconductors, secondary batteries, biotechnology, energy, hydrogen, defense, vaccines and robotics, over the next five years.
It will consist of a 75 trillion-won government-guaranteed fund for strategic industries — set to launch in December — and 75 trillion won in private-sector investment, encompassing direct and indirect financing, government-backed bonds and low-interest loan programs.