Financial Companies, what are they responsible for?

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Financial System cannot be managed by a single player. Despite its authority to design and implement policy measures, FSC will face a difficulty to execute its measures without financial companies’ cooperation. A fine-tune between the public and private sector is one of the most important parts for an advanced financial system.

Accordingly, FSC advises financial companies to be responsible for their roles in our economy. This advice has of particular significance these days, considering that mistrust and unreliability are still largely looming after the global financial crisis.

Recovering reliability is the foremost value to be sought by financial companies. For this ends, any financial accidents should be strictly prevented by maintaining a sound system for internal regulation. Financial consumers will trust financial companies, once recognizing ‘transparent and fair’ practices by financial companies.

Those financial consumers are subject to protection mechanism in our financial system, as being highly exposed to risks and frauds involved with various financial products. It has been repeatedly emphasized that a new financial paradigm in the current era is focusing on enhancing consumer protections. Then, how can financial companies contribute to it? Provide proper information about possible risks and features of financial products. That is one thing to be done by financial companies. Rather than passively following a regulatory framework forced by the government, financial companies should be actively willing to take care of their customers.

Ultimately, financial companies should perform its principle role to manage smooth supply flows of funds in our economy. With our current concern for household debt issue, providing financial products available for low-income households should be further strengthened. By doing so, financial companies can play a leading role to address household debt issue.

As well as advising financial companies, FSC is listening to voices and concerns raised by financial companies. Mutual understanding and communication between the government and private companies will help our financial system well respond to what is in need.

Regards,
Frank

* Related Previous Blog Post https://financialservicescommission.wordpress.com/2012/11/06/fsc-will-help-you-save-more/

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