Kwangsoo Kim, Chairman of the Korea Federation of Banks, "Concerns Over Bank CEOs' Disciplinary Actions Are Quite Significant"

Online Press Conference Held
"Principle of Clarity Is Distant"

[Asia Economy Reporter Kiho Sung] Kim Kwang-soo, Chairman of the Korea Federation of Banks, recently expressed significant concerns from the banking sector regarding the financial authorities' recent move to impose severe disciplinary actions on CEOs in the financial sector in connection with the Lime Asset Management fund scandal, stating, "There is considerable apprehension in the banking sector about pursuing disciplinary action against bank presidents on the grounds of inadequate internal controls."

During a Q&A session at an online press conference held at the Bankers' Hall on the 9th, Chairman Kim said, "The recent disciplinary actions by the financial supervisory authorities seem to be relatively distant from the 'principle of clarity,' which is the fundamental stance of the Ministry of Government Legislation and the courts," adding, "Therefore, it is difficult for the financial sector to predict these actions, increasing uncertainty and posing a high risk of stifling management activities."

He noted that there are many cases where CEOs are disciplined as supervisors, and in such cases, considering the reality that bank presidents cannot practically manage and supervise all employees' actions, there are many negative opinions that this effectively demands accountability for outcomes.

Chairman Kim further stated, "Therefore, 'infringing administrative measures' such as disciplinary actions need to be applied faithfully according to the relevant regulations or legal texts so that financial companies can have sufficient predictability," adding, "Through this, uncertainty in supervisory administration can be eliminated, and supervisory administration that involves mutual communication and respect rather than a one-sided relationship can be realized, creating an environment conducive to more autonomous and creative management activities."

Regarding the Financial Consumer Protection Act, which will be enforced on the 25th, he introduced that a 'joint work handling plan' including standard terms and conditions, product explanation standards, and handling methods for withdrawal rights has been prepared, and that the 'internal control standards' and 'consumer protection standards' to be enforced from September 25 are also being prepared.

Chairman Kim said, "To help financial consumers fully understand the rights strengthened by the enforcement of the Consumer Protection Act, we have produced customer guidance leaflets, stocked them at branches, and plan to proceed with related promotions as scheduled," adding, "Going forward, the banking sector will continue efforts to eradicate incomplete sales, take the lead in protecting consumer rights, and establish a sound financial culture where both financial companies and consumers coexist."

Regarding the entry of big tech into the financial industry, he emphasized, "Concerns have been raised in various places that digital financial innovation policies cause reverse discrimination against the existing financial sector and that the expansion of big tech's market dominance could undermine financial stability."

Chairman Kim stated, "Considering the policy intent of fostering the fintech industry, when establishing regulations, it is necessary to distinguish between big tech and fintech and to establish stricter business rules for big tech platforms with significant influence," adding, "Additionally, monitoring of big tech's credit risk should be strengthened, and a comprehensive review of the regulatory system is needed. Moreover, with the upcoming enforcement of the Financial Consumer Protection Act, neither big tech nor fintech can be exempted."