FSS: "Internal Controls Must Be Strengthened in Mutual Finance Sector"

The Financial Supervisory Service (FSS) has urged the mutual finance sector to strengthen internal controls amid increasing domestic and international uncertainties.

On the 20th, Park Sang-won, Deputy Governor of the FSS, requested the executives and audit officers of each central association and cooperative to comply with internal control improvement measures and to pay special attention and guidance to prevent financial accidents at the '2023 Mutual Finance Sector Internal Control Workshop' held at the FSS auditorium.

Deputy Governor Park stated, "Mutual finance cooperatives play a very important role in relational finance and inclusive finance at the forefront of the regional economy," adding, "Regarding the recent financial and economic situation, the impact on the loss absorption capacity and liquidity of mutual finance cooperatives appears to be limited."

He continued, "As domestic and international uncertainties are expanding, please strengthen internal controls by enhancing the cooperatives' loss absorption capacity through additional provisioning and conducting substantial internal audits to prevent greater losses."

The FSS also urged the mutual finance sector to strengthen credit soundness and liquidity risk management, comply with industry-specific credit limit regulations, and improve unreasonable organizational cultures such as power harassment and sexual harassment.