Full Meeting of the National Assembly's Political Affairs Committee on the 21st
"We Will Create a Competitive Environment for Banks"
Financial Services Commission Chairman Kim Ju-hyun is attending the National Assembly's audit of the Financial Services Commission held on the 24th, responding to questions from lawmakers. Photo by Yoon Dong-ju doso7@
[Asia Economy Reporter Sim Nayoung] Kim Joo-hyun, Chairman of the Financial Services Commission, said regarding the controversy over the 'bank money feast' issue raised by President Yoon Seok-yeol, "I believe that not only the president but anyone can raise concerns about such matters."
On the 21st, at the National Assembly's Political Affairs Committee plenary session, Chairman Kim stated, "Bank customers have clearly become more difficult, but the banks that lent money to customers made profits," adding, "The next question is how they made money, but when asked about any innovative efforts or services, there is no proper answer."
Chairman Kim also added, "If there are talks about raising performance bonuses amid such circumstances, anyone can question and raise issues about this." He also showed the perception that banks are not fulfilling their social roles and public responsibilities.
Chairman Kim said, "Among the financial industries, banks hold a very large share both in terms of scale and role," and added, "If you ask whether banks have truly fulfilled their roles according to their scale and public responsibilities, I think banks cannot provide an answer to that."
He continued, "The president has instructed to look at these issues more comprehensively and structurally," and said, "I agree with the recognition of the problem and believe that answers must be provided."
When Park Yong-jin, a member of the Democratic Party of Korea, pointed out that "last year's inconsistent measures by financial authorities, such as the restraint order on loan-deposit interest rate hikes, encouraged banks' interest business," Chairman Kim responded, "We responded by turning on a red light and sending signals amid a difficult market," adding, "I accept the criticism but believe we did what we had to do."
Chairman Kim and Lee Bok-hyun, Governor of the Financial Supervisory Service, agreed on the criticism of the banks' monopoly and oligopoly system and said, "We will create a competitive environment."
Chairman Kim said, "In a situation where entry into banking is very restricted, banks should competitively provide various products and services, but I doubt whether they are doing so," adding, "From a behavioral perspective, regardless of legal definitions or economic discussions about oligopoly, we must acknowledge that there are oligopolistic behaviors in the current banking industry. We will keep all options open and review solutions to the oligopoly system from the beginning."
Governor Lee also said, "Strengthening public functions will be part of it, but it is necessary to focus on the market's functions," adding, "Creating a smooth and competitive market environment is important."
On the same day, Yoon Chang-hyun, a member of the People Power Party, criticized the banks' oligopoly system, saying, "The four major banks almost dominate the commercial banks," and "We must first lower the barriers to entry for banks and promote the entry of institutions that can provide new financial services."
He further explained, "For example, if new regional banks such as Chungcheong Financial Group are established and play a role, it will increase the number of banks and reduce the oligopoly of current banks."
He also emphasized, "From the perspective of digital platforms, if an integrated platform for low-income financial services is built, it can serve as a kind of banking from the user's point of view," adding, "By integrating financial welfare perspectives in one place, we can increase public satisfaction while reducing bank oligopoly."
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