my timesThe Korea Times
BusinessBanking & Finance

Banking & Finance

Seniority-based promotions undermine Korea's labor productivity: BOK rate setter

The labor productivity of Korea’s overachieving, hard-working and competent pool of workers remains only half that of their U.S. peers, due largely to the Asian country's seniority-based promotions, a monetary policy board member of the central bank said Wednesday. The seniority-based promotions are defined by school, place of birth, family ties as well as mandatory short-term reshuffle limiting in-depth career expertise development. According to Bank of Korea (BOK) Monetary Policy Board member Chang Yong-sung, the decades of inefficiency in and misallocation of an academically stellar Korean workforce could be fixed with the performance-based evaluations used in the U.S., where job sorting matches workers to tasks based on their capabilities, promoting labor productivity and job satisfaction. He added that Korea’s contentious ongoing discussion of extending the retirement age is premature and bound to fail, unless preceded by greater labor flexibility and salary overhaul for highly paid older employees. “Korean workers in low-skilled, face-to-face professions are overqualified and

Mar 19, 2025By Lee Kyung-min
Seniority-based promotions undermine Korea's labor productivity: BOK rate setter

As population shrinks, regional banks find growth in foreign customers

Regional banks are ramping up competition in providing specialized services for foreign nationals, anticipating they will soon become a key customer base, industry officials said Wednesday. While commercial banks remain reluctant to introduce credit loan products for foreign nationals, regional banks are taking a more open approach to attract customers. They are also expanding dedicated branches and outreach services, such as financial education. Jeonbuk Bank, based in North Jeolla Province, is making some of the most notable moves. It has led the market since 2016, when it became the first to introduce credit loan services for foreign nationals. JB Financial Group Chairman Kim Ki-hong has even set a goal of reaching 1 trillion won ($688 million) in loans for foreign nationals this year, more than doubling last year’s balance of 400 billion won. Jeonbuk Bank serves as the banking arm of the group. BNK Kyongnam Bank, based in South Gyeongsang Province, also introduced a credit loan product for foreign workers last October, while Busan Bank plans to launch a similar product by the end of

Mar 19, 2025By Lee Yeon-woo
As population shrinks, regional banks find growth in foreign customers

Delayed climate change responses to pose financial risks for banks, insurers: BOK, FSS

Financial institutions are expected to incur short-term losses due to more stringent climate response policies, compounded by slumping asset values in traditional carbon-intensive industries, the central bank and financial watchdog said Tuesday. However, the immediate profit risks are outweighed by the long-term value of fostering green technologies and overall climate crisis containment, they said. According to the Bank of Korea (BOK) and the Financial Supervisory Service (FSS), failing to implement timely and proper anti-global warming action plans will exacerbate environmental damage from abnormal climate events, such as extreme temperatures and heavy downpours. This, in turn, will deteriorate the credit and insurance profiles of institutions with exposure to agriculture, food and construction. Prompt action is crucial for Korea’s export-reliant economy, long underpinned by high-carbon manufacturing, they said. This reliance has provided grounds for many growth driver industries, accounting for a quarter of the country’s GDP, to delay or outright disregard the push for a low-carbo

Mar 18, 2025By Lee Kyung-min
Delayed climate change responses to pose financial risks for banks, insurers: BOK, FSS
previous page
7475767778
next page

Most Read in Business