The role of finance to achieve ‘Creative Economy’

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“There are three areas we need to focus on (to realize ‘Creative Finance’). They are technology financing, risk capital, and innovation-friendly culture.” FSC Chairman Shin Je-Yoon told the audience at Euromoney Conferences held on September 30, 2014.

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First, in order to facilitate technology finance, the FSC has set up the infrastructure such as Technology Credit Bureaus. Moreover, the government has set up a matching fund, ‘Growth Ladder Fund’ to be used to facilitate investment based on technology credit assessment. The FSC has also developed incentives schemes to motivate banks to extend loans based on ideas and technology.

Second, since fostering risk capital is a key to the success of creative economy the Korean government will set up additional funds to support business at each development stage. Rules and regulations will be streamlined to promote crowd funding and to facilitate M&As. The FSC has already announced measures such as expanding daily stock price band and alleviating disclosure requirements for SMEs to improve regulations and conditions for a favorable capital market. The government is working on additional measures to further deepen stock markets.

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Third, the FSC has been creating innovation-friendly culture in the financial sector. Supervisory practices will be improved and regulatory transparency will be boosted to free up the business practices of banks and financial industry which are currently strapped with highly conservative attitude. Innovative efforts of the employees of financial companies will be evaluated and rewarded to encourage more innovative-friendly working culture.

“Finance needs to let go of conventional elements” Mr. Shin said. He urged the financial industry to join the government’s efforts to change and innovate financial markets, players, practices and culture since it is the only way finance can effectively support the ‘Creative Economy.’

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