[The Editors' Verdict] Urgent 'Surgery' Needed for Public Goods That Have Lost Public Trust

[Asia Economy Reporter Baek Jong-min] Banks and telecommunications are the "veins" of the modern economy. Banks supply funds to the economy. Although various financial sectors such as securities and private equity funds have emerged, banks remain the flagship players of the industry. At the end of last year, as interest rates soared, all financial companies looked only to banks. The eldest in the industry had to hold the center. Although the status of banks is said to be not what it used to be, their size is still growing. Financial holding companies centered on banks have gradually become giants.

Baek Jong-min, Opinion Editor

Life without ultra-high-speed internet and 5G (generation) mobile communication is unimaginable. It is the era of fusion. Finance cannot survive without telecommunications. The drama "Glory" and the entertainment show "Physical 100" can only be watched on online video services (OTT), not on universal terrestrial broadcasting. This means you cannot watch them without the internet. Every time there is an accident at a telecom company, users stomp their feet because they cannot use credit card payments, various pay services, and memberships. Local currencies, which have appeared in a cashless society, also become useless if telecommunications are cut off.

President Yoon Suk-yeol pointed to the banking and telecommunications sectors as public goods. His remark that essential industries serving the public must prioritize the people caused the stock prices of banks and telecom companies to tumble like falling leaves. Why did the president have to step in? The answer is simple: public sentiment has already drifted away from banks and telecommunications. President Yoon merely represented the public mood.

Can it be said that the banking and telecommunications sectors faithfully served their customers, the people, during the COVID-19 period? Immediately after the outbreak of COVID-19, despite the severe health crisis, the U.S. federal and state governments classified banks and telecom companies as essential industries and allowed them to operate. U.S. banks continued operations even as employees dropped out due to infections. Customers appreciated the sacrifices of bank employees. How about our situation? Reduced banking hours were only recently normalized after repeated government pressure. When interest rates plummeted right after the COVID-19 outbreak, banks made money by expanding loans, and last year, when interest rates rose, they hit another financial jackpot. Even as many citizens faced economic hardships, banks held celebrations for bonuses and retirement money.

What about telecommunications? Many citizens pay expensive 5G fees but are dissatisfied because the service is inadequate. Since competition is limited, a reduction in telecom fees is far off. Last year, while working in the U.S., I used an unlimited 5G plan for $25 per month. Returning to Korea and seeing the fees was astonishing. One telecom company apologized for a security breach that leaked customer information. Users watching the belated and chaotic apology for the problem seem to feel ignored.

Although public sentiment has left, CEOs who were granted autonomy during progressive governments do not want to give up management rights. Is the self-renewal of CEOs in ownerless companies legitimate? They forget that they neglected the interests of the organization and the people and blame government intervention. The board of directors has degenerated into a loyalist organization and even created bylaws prioritizing the review of the incumbent CEO's reappointment. It's outrageous.

I do not intend to unconditionally defend government intervention in private companies without government shares. The companies that created such situations are more problematic. Stock price declines are only temporary. Health that can develop amid competition is the priority. Once health is restored, stock prices naturally head higher. Surgery is better sooner.

Baek Jong-min, Opinion Editor