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| Financial Supervisory Service (FSS) Governor Yoon Suk-heun speaks during a press conference at a restaurant in Yeouido, Seoul, Monday. / Courtesy of FSS |
FSS governor vows reshuffle for consumer protection
By Park Jae-hyuk
The chief of the Financial Supervisory Service (FSS) implied Monday that sanctions for the banks' leaders involved in the "DLF fiasco" should hold weight in order to prevent further such cases from occurring.
FSS Governor Yoon Suk-heun told reporters the case in which banks engaged in the misselling of certain financial derivative options referred to as derivative linked funds (DLFs) that caused major losses for investors, was the most difficult issue for the regulator this year.
"Sanctions should be fair. They should send the right signal to the market," FSS Governor Yoon Suk-heun told reporters at a press conference held at a restaurant in Yeouido, Seoul.
Authorities have yet to finalize punitive measures for the CEOs of the KEB Hana and Woori banks.
Yoon also urged banks to accept the level of compensation put forward by the FSS, Dec. 13, for losses incurred by financial derivatives options referred to as knock-in-knock-out (KIKO) contracts.
The non-binding ruling reached by the FSS' dispute settlement committee came in 11 years after companies applied for the losses suffered from the contracts. The options caused over 3 trillion won in losses to the firms at the time of the 2008 global financial crisis.
Yoon admitted Korean financial institutions have been insufficient in their roles as financial intermediaries, but was confident about competitiveness of the nation's financial industry.
He also said the forthcoming FSS reshuffle will aim at better consumer protection, constant surveillance of the capital market and strengthening of insurance and pension sectors for the aging society.
The governor reiterated the importance of a switch to "functional supervision" which allows the watchdog to supervise financial companies without distinction of their business sectors, such as bank, brokerage and insurer.
"As more integrations are taking place in the financial industry, the financial authorities should cope with those changes," he said. "I am thinking of reshuffling the organization in line with those changes."
Through these efforts, Yoon said he seeks to win back public trust in the financial authorities by the end of his term in 2021.
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