FSC chairman discusses reforms with new group

Financial Services Commission Chairman Yim Jong-yong presided over the first meeting of a consultative body of experts who will push forward with what he calls “destructive reform” in Korea’s finance industry.

The chairman urged swift action, saying during the first meeting of 19 analysts and academics that this was the “last opportunity” for the financial sector to pursue reforms that are essential to its survival.

“Our financial sector is facing various crises and challenges that we have never experienced before amid fast-changing financial circumstances such as the low interest rate, an aging society, and convergence between finance and IT,” Yim said in his opening remarks at the meeting held at the press center in central Seoul.

“As the first step toward finance reform, our watchdog will switch our role to that of a referee from that of a coach who has directed everything so far.

“From directing to inspecting and sanctioning, we will control all processes [of the reform],” he said.

At a National Assembly hearing to approve his nomination earlier this month, Yim pledged to launch the advisory organization related to the nation’s top watchdog for reforming the Korean financial sector and has been preparing for the meeting since he took over as FSC chief.

The body is similar to the financial reform committee launched under the Kim Young-sam administration in 1997 when Korea was struggling amid the Asian financial crisis and as a result had to carry out economic reforms in return for an IMF bailout.

Yim pointed out the necessity of improving infrastructure in capital market including the Kospi and Kosdaq to boost the domestic market and challenge a new capital market, calling them “very crucial tasks.”

During the meeting the members gave the chairmanship to Min Sang-kee, an honorary professor of international finance at Seoul National University.

At a press conference after the discussion, newly elected chairman Min said the body would deal with various issues, not just financial reforms designated by the FSC.

“Besides the 18 tasks chosen by the FSC [on March 17], we will present a necessary blueprint for the development of the financial industry with a long-term perspective,” Min said. “We will make conclusions on reform plans speedily, as many as possible in April, and wrap up all issues in July or August.”

The FSC’s 18 financial reforms include improving regulations at Korea Exchange and the management of national pensions.

BY KIM HEE-JIN [kim.heejin@joongang.co.kr]