FSC announces plan to reform financial regulatory system

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The FSC announced its plan to reform financial regulatory system which is expected to become a stepping stone to realize the Park Geun-hye administration’s financial visions.

Below are FSC Chairman Shin Je-Yoon’s statements during the press briefing on July 10, Thursday.

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“Korea’s financial industry is faced with a crossroads of further development and decline. Complacency and out-dated regulations are the main culprits. Benchmarking advanced economies’ experiences of overcoming difficulties through all-out financial reform, the Korean government will carry out an extensive reform based on a thorough review on 3,100 financial regulations. By doing so, the financial industry will transform into a strong supporter of the real economy creating new opportunities, investment demands, and new jobs.

What I found out after numerous meetings with the financial industry is that there are so many out-dated and unnecessary regulations. Due to such, financial businesses have to overcome high entry barriers. Verbal administrative guidances are rampant in the industry and many of them do not even have clear legal ground. Financial companies complain about inefficient inspections, audits, and sanctions against them. Despite several efforts in the past, there hasn’t been much improvements. The FSC will take a different approach this time.

Rather than just abolishing regulations, the government will take a two-track approach: maintain or strengthen good regulations and abolish or revise bad regulations. Regulations related to financial system stability, financial consumer protection and personal information security will be maintained or strengthened whereas compliance costs will be brought down.”

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“As the result of conducting a thorough survey, 3,100 regulations were listed down. 1,700 tasks were selected among which 700 will be improved.

The blueprint for financial regulatory reform announced today is just the beginning and we have much longer way to go than what we have achieved so far. We will do our best to come out with the results that will do actual help and good to the financial consumers.”

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