Hello our readers.
If you have been carefully reading our blog posts, you would have recognized that ‘financial consumer protection’ is a recurring theme these days. With ever-increasing financial market worldwide, financial consumers’ role is paramount. Consumers owe both responsibilities and rights in the market.
FSC’s Chairman Kim Seok-Dong has put an emphasis on financial consumer protection in his keynote speeches and addresses. To give you an example, he highlighted the fact that ‘policy measures should align with a new paradigm shift focusing on financial consumer protection’. This idea is not only shared by policy makers in Korea, but actually widely acknowledged at international discussions.
Two years ago, February in 2011, the G20 Finance Ministers and Central Bank Governors requested that the OECD, the FSB and other relevant international organizations should develop common principles on the field of financial services. Accordingly, in October 2011, ‘G20 High-Level Principles on Financial Consumer Protection’ were released as a response to the request.
Why is financial consumer protection spotlighted? This is because consumer confidence and trust in a well-functioning market for financial services promotes financial stability, growth, efficiency and innovation over the long term. Hence, it is an important issue to reinforce and integrate financial consumer protection with other financial inclusion and financial education policies.
What is sought by the principles? The high-level principles are designed ‘to assist G20 countries and other interested economies to enhance financial consumer protection’. By defining its aim to ‘assist’ countries and economies, the principles are non-binding and voluntary while applicable across all financial services sectors. The principles are intended to complement and build upon financial regulation and supervision and financial governance.
Over the next three blog posts, the principles will be explained in details. Let us find out ten principles compromised by the G20 countries, and what the principles are pursuing. As it has been two years since the principles being announced, it would be a good chance to reflect how they have been managed so far.