Private New Year's Gathering Hosted by Credit Finance Association
Emphasis on Soundness and Risk Management
Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), met with CEOs of credit card companies, capital companies, and other specialized credit finance companies to urge them to actively engage in debt restructuring with vulnerable borrowers and to thoroughly manage soundness. This was a reiteration of his request made just four days earlier, emphasizing the role of specialized credit finance companies as a pillar of support for low-income financial services amid increased financial market volatility caused by the impeachment crisis of President Yoon Suk-yeol.
Lee Bok-hyun, Governor of the Financial Supervisory Service, is speaking at the 'Banking Sector Small Business Financial Support Meeting' held at the Bankers' Hall in Jung-gu, Seoul, on the morning of the 23rd of last month. Photo by Yonhap News
According to the financial sector, Governor Lee made these remarks on the 20th during a private New Year's gathering hosted by the Korea Federation of Credit Finance Associations at the Plaza Hotel in Jung-gu, Seoul, where he met with CEOs of specialized credit finance companies. The gathering was attended by Governor Lee, Jeong Wan-gyu, Chairman of the Korea Federation of Credit Finance Associations, and Han Gu, Deputy Director of the FSS’s Small and Low-Income Finance Division.
Earlier, on the 16th, Governor Lee met with 68 companies including credit card companies, lease and installment finance companies, and new technology finance companies at the '2024 Joint New Year CEO Breakfast Meeting of Credit Finance Companies,' encouraging them to realize financial stability through enhancing risk response systems and strengthening loss absorption capacity. It is reported that similar points were emphasized at the New Year's gathering as well.
According to the financial sector, the Personal Debtor Protection Act, which allows individual debtors to request and negotiate debt restructuring directly with financial companies, has been in effect since October last year. This enables debt restructuring without going through the Credit Counseling and Recovery Service. To ensure the system’s stabilization, the Financial Services Commission decided at its regular meeting on the 15th to grant an additional guidance period until April 16.
A senior financial official stated, "On that day, Governor Lee emphasized the proper operation of the debt restructuring system to ensure smooth debt restructuring for individual borrowers with medium to low credit ratings, and urged attention to liquidity management of specialized credit finance companies and delinquency rate management of capital companies."
It is reported that Governor Lee gave a congratulatory speech lasting about 10 to 15 minutes before leaving. Afterwards, attendees listened to a lecture on macroeconomic trends by an external instructor from the International Financial Center. Given the increased financial market volatility due to the impeachment crisis of President Yoon, it appears that economic trends were discussed.
A financial sector official said, "As far as I know, financial authorities including Deputy Director Han who was present did not make any additional requests to the CEOs of specialized credit finance companies beyond Governor Lee’s orders. This is understood as a private New Year CEO meeting of specialized credit finance companies that the FSS Governor attends annually, with an emphasis on risk management."
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