"Devise Measures to Directly Reduce Interest Burden for Self-Employed and Small Business Owners"

Meeting between Financial Services Commission Chairman and Heads of 8 Major Bank Holdings
Plan to Reduce Interest Burden on Self-Employed and Small Business Owners to Be Pursued

On the 20th, Kim Ju-hyun, Chairman of the Financial Services Commission, stated regarding the social responsibility of the financial sector, "Within the maximum range that does not harm the soundness of financial companies, please devise tangible measures that can directly reduce the increased interest burden after the end of COVID-19 to a certain extent, so that it can be felt by the public."

On the same day, Kim held a meeting at the Bankers' Hall in Jung-gu, Seoul, with Lee Bok-hyun, Governor of the Financial Supervisory Service, and the chairpersons of eight domestic bank holding companies, saying, "Please consider the desperate situation of self-employed and small business owners who are burdened by high interest rates."

Financial Services Commission and Financial Supervisory Service hold a meeting with financial holding company chairpersons [Image source=Yonhap News]

At the meeting held amid President Yoon Suk-yeol's so-called 'bank servitude' remarks and the opposition's legislative push for the so-called 'windfall tax,' all CEOs of the eight major domestic bank holding companies attended, including Kim Ju-hyun and Governor Lee Bok-hyun, as well as Yang Jong-hee, KB Financial Group chairman-designate (vice chairman), Jin Ok-dong, Shinhan Financial Group chairman, Ham Young-joo, Hana Financial Group chairman, Lim Jong-ryong, Woori Financial Group chairman, Lee Seok-jun, NH Nonghyup Financial Group chairman, Bin Dae-in, BNK Financial Group chairman, Kim Ki-heung, JB Financial Group chairman, and Kim Tae-oh, DGB Financial Group chairman.

Kim Ju-hyun, Chairman of the Financial Services Commission (right), and Lee Bok-hyun, Governor of the Financial Supervisory Service (left), are attending the 'Financial Holding Companies Chairmen Meeting' held on the 20th at the Federation of Banks Building in Jung-gu, Seoul, exchanging opinions. Photo by Kang Jin-hyung aymsdream@

Chairman Kim pointed out that the banking sector's net income, which was about 13.1 trillion won in 2019 before COVID-19, increased to 17.7 trillion won last year, stating, "In a situation where the collapse of neighborhood and local markets supporting our economy is feared due to the rapidly increased interest burden in a short period, the unprecedented increase in interest income in the financial sector means an unprecedented increase in the burden on the public." He added, "There is also a harsh view that the enormous bank profits are merely the result of external environmental changes such as rising interest rates."

Kim also said, "Each financial company has promoted social contribution under the banner of Environmental, Social, and Governance (ESG) management, but negative perceptions of the financial industry have led to the proposal of windfall tax-related bills," emphasizing, "Ultimately, it depends on how the financial industry responds. I urge the industry to gather consensus and devise measures to reduce the interest burden."

Governor Lee also requested, "In a situation where legislative discussions on the windfall tax are emerging in the National Assembly, since our financial sector is maintaining soundness and profitability better than ever before, I ask the industry to prepare support measures that meet the public's expectations," adding, "Please carefully manage so that the support measures can be implemented smoothly without side effects."

Starting from this discussion, the eight major bank holding companies and the Korea Federation of Banks decided to expand their joint social role to reduce the interest burden on self-employed and small business owners. They also agreed to actively consider ways to reduce part of the future interest burden. Each bank holding company and the Korea Federation of Banks plan to announce the final detailed support scale and other measures within the year after further discussions with their bank subsidiaries.

Meanwhile, the financial authorities plan to hold a series of CEO meetings by financial sector, including banks, financial investment, and insurance, starting with this meeting.