[Yeouido Art Museum]③ Financial Authorities' Win-Win Finance and High-Interest Loan Sharks

15th Century Flanders Trade and Finance Flourished... Negative Perception of Financiers
Traces of Christian Worldview... Korea Emphasizes Public Nature of Banks

Money changer and his wife by Quentin Massys (1514).

At the end of last year, the lower bound of mortgage loan interest rates soared to the 5% range, but recently they have dropped to the 3% range. With the Bank of Korea holding the base rate steady for three consecutive times, concerns about high interest rates have somewhat eased. However, Lee Bok-hyun, the Governor of the Financial Supervisory Service, continues his relentless 'win-win finance' efforts.

Next week, Governor Lee will visit Gwangju Bank and Jeonbuk Bank. Previously, he held a 'win-win finance meeting' with the four major financial holding companies, and this time he plans to announce support measures for win-win finance aimed at vulnerable groups such as small business owners in cooperation with these two banks.

Governor Lee's on-site visits to banks began with the Financial Services Commission's work report in January. At that meeting, President Yoon Suk-yeol emphasized the public and social nature of the financial sector and requested that banks participate in sharing the burdens of ordinary citizens.

On March 23, Governor Lee visited the KB Kookmin Bank headquarters in Yeouido, Seoul, stating, "In a situation where high interest rates increase the interest burden on the people, banks also need to share the pain and strive for coexistence as members of the national economy."

The Financial Services Commission also joined in. On April 6, Vice Chairman Kim So-young pointed out at a 'bank CEOs meeting' that "It is absolutely not in line with the public's expectations for banks to easily earn record profits through interest rate spreads and pay out large bonuses immediately without sufficient preparation for the future."

The financial industry interpreted the remarks from the financial authorities as a warning to banks that are 'profiting from interest.' At the time, there were also complaints within the financial sector. In a market economy, how can the financial authorities tell banks not to raise interest rates?

The History of Denying Interest Profiteering... Usurers in Famous Paintings

"If you lend money to any of my people among you who is poor, you shall not be like a moneylender to him; you shall not charge him interest."

Exodus 22:24

Seri of Marinus van Reymerswaele and his wife (1538).

The essence of banking is 'interest profiteering.' It is natural to make money from the difference between deposit and loan interest rates. However, the negative view of finance (interest profiteering) has a long history. The Bible prohibits interest, and Shylock in the classic 'The Merchant of Venice' is portrayed as a negative character.

The first painting is "The Moneychanger and His Wife" by Quentin Matsys, a representative painter of 15th-century Flanders. In Korea, it is sometimes translated as "The Usurer and His Wife."

Flanders refers to the western part of present-day Netherlands and northern Belgium. Located in a region connecting the Baltic countries in the north, Mediterranean countries in the south, England in the east, and the continent in the west, international trade flourished thanks to its so-called 'geographical advantage.' In regions where international trade prospered, finance such as currency exchange and lending also developed. Naturally, many middle-class people accumulated wealth.

Flanders in the 15th century, just emerging from the Middle Ages, was a period when secular (capitalist) pleasures were just beginning to be recognized under Christian values. This is well reflected in the painting. The wife in red is reading the Bible, while the husband in blue is counting money. It shows the era's atmosphere where the sacred and the secular coexisted.

This work fully embodies the 15th-century Flemish painting style. Look at the husband. The ermine fur decorating his clothes was one of the luxury items at the time. The texture and volume of the ermine fur around the neck and cuffs seem to extend beyond the frame. The hand holding the money, with blue veins and knuckles, creates an illusion as if it is right in front of the viewer.

Quentin Massys, 'The Moneychanger and His Wife (1514)' excerpt

Looking at the book the wife is reading, one is amazed by the detail. The woman in red clearly holds a child, a typical icon representing Mary and baby Jesus.

Today, blue symbolizes the Virgin Mary, but in the 15th century, painters like Jan van Eyck sometimes depicted Mary in red. The detailed depiction and strong detail are characteristic of 15th-century Flanders.

Secondly, symbolism is also a unique feature. Look at the small round mirror placed at the center bottom of the painting. Through the window, the sky and outside scenery are visible. The window frame resembles a cross. The scale the husband uses to check the value of money also symbolizes the conscience of a believer.

On the shelf behind, an apple reminiscent of the fruit of the tree of knowledge of good and evil stands out. It shows that the couple, who accumulated wealth (secular) through interest and exchange, still valued religious faith.

The second painting is by Belgian artist Marinus van Reymerswaele, who paid homage to Quentin Matsys' work. Although the composition and theme are the same, the detailed depiction and iconography in the background make Matsys' work more striking.

Memories of the Foreign Exchange Crisis... Expectations for Banks' 'Public Nature' Saved by Tax Money

Woori Bank narrowly escaped the risk of being delisted during the 1997 foreign exchange crisis.

How different is the 15th century, when those who accumulated wealth through interest and loans were self-restrained and placed religious values above all, from today? It seems the perspective on finance remains similar.

It is somewhat unfair for banks, as they did not engage in reckless business or real estate speculation. However, there is a reason why financial authorities criticize banks for easily making profits.

After experiencing the 1997 foreign exchange crisis, there was a strong tendency to emphasize the 'public nature' of domestic banks. This was because public funds were injected during the restructuring of major banks.

Woori Financial Group is a representative example. It was launched through the merger of Commercial Bank and Hanbit Bank during the foreign exchange crisis. At that time, the government poured 12.7663 trillion won of public funds into Woori Financial Group. Woori Financial Group repaid all public funds last year. Currently, the Korea Deposit Insurance Corporation's stake in Woori Bank has decreased to about 1.29%.

The four major financial holding companies?Shinhan Bank, Kookmin Bank, Hana Bank, and others?were all newly launched through restructuring and mergers during the foreign exchange crisis. This is the background behind the financial authorities' emphasis on 'win-win' and their pressure on banks that profit from interest.

Regarding this, a Financial Supervisory Service official said, "Separate from the Bank of Korea's monetary policy, the remarks were made in the context of 'fine-tuning' the rapid rise in market interest rates due to external issues."

While being aware of criticism that the financial authorities might be interfering with market interest rates, it can be interpreted as a message that they will not overlook banks profiting from interest in exceptional circumstances. The perspective on banks has not changed much from ancient times to the present, and it is clear that it will be difficult to change in the future.