8th Anti Money Laundering Day

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November 28 was the 8th anniversary of “Anti Money Laundering Day” which also is the foundation day of the Financial Intelligence Unit (FIU), a FSC-affiliated authority responsible for the prevention of money laundering and terrorist financing.

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Since the establishment, the day was celebrated every year since 2007 to raise people’s awareness and interest on combating money laundering. This year, a commemoration event was held with the presence of more than 220 figures from the financial authorities, institutions, and academic circle.

“Thanks to outstanding IT infrastructure, we could successfully implement necessary systems for fighting money laundering and we are providing assistance to developing nations to do the same. Such efforts are awarded by being appointed as the chair country of the FATF beginning from next year” FSC Chairman Shin Je-Yoon said during his congratulatory speech praising everyone’s hard work and dedication. He also raised necessity for strengthening and expanding the range of supervision to the non-banking sector as well to effectively respond to evolving money laundering cries.

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Kyongnam Bank received a presidential award for its excellent contribution in prevention of money laundering. Meritz Fire & Marine Insurance was awarded Prime Minister’s commendation, and 30 employees of Shinhan and Korea Exchange Bank was granted FSC Chairman’s award.

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51st Savings Day celebrated

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51st Savings Day was celebrated on October 28, Tuesday at International Conference Hall, Press Center. More than 250 figures including awardees and employees from financial institutions joined the event to commemorate the meaningful day.

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This year, 91 people received awards for their exemplary saving practices. Mr. Park, the receiver of Peony Medal, overcame poverty inherited by his parents through diligent working and saving as much as he could. Despite that he had to drop out of middle school because he couldn’t afford the tuition fee, he made his own fortune by working harder than others. Managing his foodstuff factory, he has been providing financial support to nursery schools. He has never been lazy helping less fortunate neighbors.

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There were also number of celebrities who were awarded for best saving practices. Actress Kim Hee-ae and comedian Seo Kyeong-suk received presidential commendation. Anchor Baek Seung-joo and model Byeon Jung-soo were awarded prime minister commendation. Baseball player Jang Won-sam and singer Kim Heung-kook received FSC chairman commendation.

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In his congratulatory speech, FSC Chairman Shin Je-Yoon expressed gratitude to all participants for their active participation in the national savings campaign. Furthermore, he mentioned that the development of Korea’s real economy largely owes to the dedicated efforts of the financial industry. He made commitments that the government will find ways to encourage development of various pension savings products, and strengthen financial consumer protection.

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Chairman Shin departs for FATF Plenary Session in Paris

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FSC Chairman Shin Je-Yoon will depart for Paris to attend FATF Plenary Meeting from October 18 to 25. As Korea assumed the presidency in February, Chairman Shin will be appointed president from July, 2015. He has been serving as vice-president from July.

The FATF hosts annual plenary meeting with 36 standing member countries, 8 regional anti-money laundering bodies, and 24 international organizations including the IMF. Chairman Shin will start his duties as FATF vice president by attending all meetings including steering committee meeting on the 19th, working group session on the 20th and 21th, and plenary meeting from October 22 to 24.

Korea’s great responsibilities in the FATF reflect Korea’s high international status as a rule setter in the fields of anti-money laundering and counter terrorist financing.

Government to strengthen insurance industry’s role to better protect and safeguard people’s life

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“As we have witnessed from the Sewol incident, the impact of such disasters on our life is devastating. All of us have to recognize the money spent to ensure safety as an investment for the future, not a cost.”

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FSC Chairman Shin Je-Yoon mentioned in a conference held in Hanhwa 63 City (63 Building), Yeoui-do with the representatives of insurance industry, academia, and public agencies. He also had time to participate in safety drill conducted by Korea Fire Protection Association(KFPA).

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“Safety and insurance are the two pillars of national disaster management. Private sector, including the insurance industry, has to strengthen its role of pre-emptive disaster prevention.”

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To such backdrop, the government will strengthen the role of private insurance companies to effectively cover victims’ damages in case of massive disasters. The government will improve regulations and insurance policies. Comprehensive disaster insurance system against all risks related to disasters will be introduced. Moreover, insurance companies’ disaster prevention functions will be significantly strengthened.

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“Active participation and support of the private sector is crucial to reinforce the current social safety network.” Chairman Shin said during his speech to the participants. He emphasized that there cannot be any failure when it comes to policies related to the safety and protection of the people. Moreover, he promised the government’s unsparing support to strengthen the insurance sector’s role of preventing disasters.

FSC Chairman praises employees of banks with best performances related to technology finance

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On the occasion of the 100-day anniversary of the announcement of ‘Plan to Facilitate Technology Finance’, Chairman Shin Je-Yoon visited branch offices of financial firms which mostly actively gave out loans based on technology assessment results. Offices of Shinhan bank and IBK in Sihwa Industrial Complex were selected as best performing bank branches in the capital area.

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18 commercial banks signed MOUs with Korea Technology Finance Corporation and Korea Finance Corporation on June 30, 2014 and started providing funds to companies based on technology evaluation results. Shinhan Bank’s Sihwa Financial Center office provided technology finance accounting for 9.33 billion won for the past three months and IBK Sihwa office gave out 15.3 billion worth of loans based on technology assessment.

Chairman Shin praised the bank employees’ dedicated efforts and evaluated that there have been meaningful changes in the business practices of banks during the last 100 days. He compared the effect of technology finance as ‘killing three birds with one stone’ meaning that it benefits SMEs, banks, and the national economy all at once. Technology finance provides necessary funds to SMEs which have been neglected by financial institutions, allows banks to more effectively manage risks by enabling accurate estimation of default rates through technology credit assessment, and creates new growth engine for the national economy. Moreover, he added that accumulated data related to domestic companies’ technology information will become an invaluable national asset that can be utilized in reviewing government-level R&D projects and investment.

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The government will offer wide range of benefits to banks with excellent technology finance performances. The FSC will accelerate its efforts to realize ‘Creative Finance’ by further facilitating technology finance. Chairman Shin Je-Yoon will pay regular visit to nationwide bank branches with great technology finance performances to praise their efforts.

FSC to lead IT-finance convergence

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Convergence of internet technology and finance is one of the key tasks to realize ‘Creative Economy.’ Under such recognition, the FSC has been exerting its utmost efforts to improve regulations related to online payment system.

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This time, FSC Chairman Shin Je-Yoon visited IT firms representing Korea’s IT industry located in Pan-gyo Techno Valley on Monday. On the visit to Kakao Talk office, he was briefed on ‘Bank Wallet Kakao‘ and ‘Kakao Pay’, two most innovative online payment systems that are gaining popularity recently.

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“The government will overhaul negative regulations hampering convergence of IT and finance,” announced Chairman Shin while urging the industry to take more enterprising attitude to create new markets and warning that complacency will only lead to the failure to adapt to the global trend.

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“We will seek balance between actively introducing newly-developed financial services and strengthening consumer protection measures,” he said.

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The FSC and participants agreed to form a government-industry cooperative body for IT-finance convergence to share future vision and discuss measures to further develop the industry.

Finance and Korean re-unification

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As President Park Geun-hye underscored, re-unification is a golden opportunity to take a quantum jump for Korea’s economy. It addressed low growth and aging population in the South. At the same time, it helps the North escape from extreme poverty. With re-unification, the Korean economy can build a stronger, sustainable, and good economy.

However, re-unification requires tremendous cost. The fear of high cost has been lingering around. “This is where ‘Re-unification Finance’ comes in”, FSC Chairman Shin Je-Yoon mentioned.

“It will replace the ‘fear of re-unification cost’ with the ‘hope for re-unification bonanza’.”

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Finance will primarily serve to alleviate the economic impact of the re-unification. Afterwards, it will facilitate the economic integration.

To make sure that the current fear turns into the hope for bonanza, there are four key areas to focus on. First, North Korea’s monetary system must be reset. Its current mono-banking system needs to be changed into a two-tier banking system. Moreover, introducing a single exchange regime and restructuring its external debts will help the North gain competitiveness in the global financial market. Surely, such approaches should be undertaken in an orderly manner to minimize the impact of resetting the monetary system.

Second, the North’s financial infrastructure must be reformed. It is not an exaggeration to say the North Korea has no financial infrastructure. Essential financial infrastructures such as deposit insurance system, payment and supervisory system need to be established.

Third, there must be appropriate ways to finance development needs of the North. Rebuilding the North Korean economy is an investment that ensures brighter future for both, not a one-time cost. Therefore, funding plans for a wide range of areas need to be formulated pre-emptively. The government will use various measures to encourage private and foreign investors, and international organizations to invest in the North taking full use of Korea’s experience of achieving the ‘Miracle on the Han River.’

When the South’s rich capital and invaluable experience are combined with the North’s young and disciplined labor force, it will create tremendous synergy and lead to a sustainable economy. It will also benefit the global community since countries would be provided more room to spend for the good of their people instead of an arms race.

Chairman Shin sited Ahn Chang-ho, a Korean independence activist, “A building stands firm when it is build on a strong foundation, and good fruits come from a tree with strong roots.” It is clear that ‘One Korea’ would provide tremendous growth opportunity for the two Koreas and the rest of the world, however, it cannot happen without sufficient preparations, which means that we need to strengthen competitiveness and encourage innovation for the financial industry.