New FSC chief vows 'level playing field'

Shin Je-yoon, the nominee to head the Financial Services Commission, talks to reporters at the Banker’s Club in downtown Seoul, Saturday. / Yonhap

Shin has no plans to ease rules on DTI, LTV

By Kim Jae-kyoung

The nominee to become the nation’s top financial regulator said Sunday he would seek to create a “level playing field” between domestic and foreign capital.

“We live in a global era. My regulatory principle toward foreign capital or financial firms is equal treatment regardless of where they are from,” Shin Je-yoon, the nominee to become chairman of the Financial Services Commission (FSC), said in a phone interview Sunday.

“Both domestic and foreign capital will have to compete under a fair regulatory environment.”

The remark came a day after President Park Geun-hye nominated the first vice finance minister as the FSC’s new head, Saturday. His nomination needs to be confirmed by the National Assembly, after which he would replace Kim Seok-dong, who resigned a week ago.

Given Shin’s rich experience and extensive networks in the field of global finance, it is highly probable he will place greater emphasis on internationalizing financial markets and Korean companies than his predecessors.

The 55-year-old made it clear he will continue to follow the government’s vision to foster Korean-style investment banks by encouraging local financial firms to provide finance for corporate investment and trade.

“Finance is a risk management business,” he said. “If we focus too much on stability, there is no way to create new revenue sources. In this regard, I will try to have the finance sector play a bigger role in supporting shipbuilding finance and future technologies.”

Shin is a leading specialist on international finance, who has worked as the FSC vice chairman and director of the finance ministry's international finance bureau. He also played a key role in setting the financial agenda for the 2010 G20 Seoul Summit by chairing the vice finance ministers’ meeting.

Regarding questions over mortgage regulations, Shin said he has no plans to ease rules on loan-to-value (LTV) ratio and debt-to-income (DTI) ratios. Of late, there have been growing calls for deregulation to revitalize the sluggish property market.

“I will not think about deregulation for a while. We have to look at the financial health of banks but at the same time we need to reinvigorate the real estate market. They are correlated,” he added. “The new economic team will seek solutions from various angles.”

DTI and LTV are two key tools designed to curb household loans, which reached a record 959.4 trillion won ($884.6 billion) in December.

The nominee said once he takes office, he will also place emphasis on restoring people’s trust in financial stability, strengthening the role of finance in the real economy and ensuring stronger consumer protection policies.

“It is crucial to rebuild people’s trust toward financial stability tarnished by the savings bank scandal and improve financial firms’ soundness to global standards,” he said.

Shin also stressed the importance of financial firms’ taking greater social responsibility. “Financial firms should make further efforts to create more jobs by supporting growth of the real economy,” he said.