Lee Bok-hyun, Financial Supervisory Service Chief, Holds Financial Situation Review Meeting
Postpones Inspection Results Announcement, Considering Economic Conditions and Financial Environment
Lee Bok-hyun Urges "Discovery of Various Tasks for Regulatory Rationalization"
Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), ordered the identification of various tasks for regulatory rationalization to prevent financial companies from facing difficulties due to reduced financial resilience caused by rapid exchange rate fluctuations. He also decided to postpone the announcement of major inspection results of financial institutions, including Woori Bank, to early next year, considering the financial market instability caused by the emergency martial law situation.
On the 12th, Governor Lee held a financial situation review meeting in the morning and stated that the temporary increase in financial market volatility has reduced the financial resilience of financial companies, which could affect urgent fund supply and normal dividend payments. He said, "Please communicate with the market, identify various tasks for regulatory rationalization, propose and consult with relevant authorities such as the Financial Services Commission, and make every effort to ensure that the economy and finance operate smoothly while adhering to financial supervisory principles."
He requested a review to improve the bank buffer capital ratio regulations and liquidity ratio calculation standards to a reasonable level within the discretionary scope of each country compared to global regulatory standards. He also asked for consideration of actively utilizing transitional measures applicable during rapid changes in the financial environment related to the new insurance soundness system (K-ICS).
Governor Lee announced that the announcement of major inspection results for financial institutions, including Woori Bank, which underwent regular inspections due to the improper loan case involving relatives of former Woori Financial Group Chairman Sohn Tae-seung, will be postponed to early next year. The FSS had originally planned to announce the regular inspection results in December.
The FSS conducted regular inspections of Woori Financial Group and Woori Bank from October until the 29th of last month. Woori Bank is under prosecution investigation for allegedly providing improper loans amounting to 35 billion KRW to corporations or individual business owners related to former Chairman Sohn's relatives from April 3, 2020, to January 16 of this year. During the regular inspection process of Woori Financial Group and Woori Bank, the FSS reportedly confirmed that a significant number of improper loans were executed during the tenure of Chairman Lim Jong-ryong as well.
Meanwhile, Governor Lee urged, "As political instability increases market volatility and the possibility of large losses from derivatives or financial accidents grows, please ensure thorough internal controls."
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