Focus on Capital Market and Real Estate Issues
Equal Respect for Rights of Major and Minority Shareholders
Zero Tolerance for Stock Price Manipulation
Resolving Remaining PF Insolvencies to Support Smooth Housing Supply
Firm Commitment to Managing Total Household Loans
Significantly Enhanced Monitoring of Financial Consumers
On August 14, Lee Chanjin, Governor of the Financial Supervisory Service, stated at his inauguration ceremony, "We will support the successful implementation of the Commercial Act amendment to establish an order in which the rights and interests of both major and minority shareholders are respected equally."
In his inaugural address that afternoon, Governor Lee said, "I will do my utmost to ensure that the financial industry not only supports the country's major economic transformation but also becomes a core engine of growth."
He pointed out the current reality of being at a pivotal moment of economic transformation, emphasizing, "All economic actors must be able to participate in innovation and value creation, trusting in a fair distribution of outcomes. Finance, by virtue of its fundamental role in efficient resource allocation, will be at the center of all these processes."
Governor Lee outlined five main supervisory directions: expanding the supply of venture capital, establishing fair market order, swiftly resolving real estate project financing (PF) issues, stabilizing the total volume of household debt, and strengthening protection for financial consumers. These directions can be broadly categorized into two capital market issues and two real estate issues.
First, he said, "We will expand the supply of venture capital to small and venture businesses by introducing venture capital supply funds and a co-prosperity index for small and medium-sized enterprises. At the same time, we will strengthen the capital market's role in funding so that companies can smoothly secure growth capital from the market."
He also expressed a strong commitment to establishing a fair market order. "Companies must establish fair governance structures centered on shareholder value," he said, adding, "We will create an order in which the rights and interests of both major and minority shareholders are respected equally." He further stated, "We will respond strictly and with zero tolerance to acts that undermine market order and fairness, such as stock price manipulation or abuse of monopoly positions."
Governor Lee also made clear his intention to thoroughly oversee financial supervision related to real estate. "A large volume of real estate PF loans has become non-performing, causing severe delays in housing supply," he said. "We will swiftly resolve remaining PF insolvencies, support the normalization of sound projects through policy finance, and create a financial environment that enables smooth housing supply."
In addition, he announced plans to fundamentally improve related systems to prevent a recurrence of PF insolvencies in the future, such as by strengthening PF credit screening and supplementing requirements for project developers.
He also made it clear that the total volume of household debt would continue to be closely managed. Governor Lee pointed out that rising real estate prices are fueling an increase in household loans, which in turn further drives up real estate prices, creating a vicious cycle.
"In this process, loan soundness is deteriorating, and domestic funds are increasingly flowing into real estate rather than productive sectors, exacerbating negative side effects," he said. "We will firmly maintain the policy of stable management of total household debt, while breaking the vicious cycle between debt and housing prices to safeguard financial stability."
Additionally, he announced plans to strengthen support for small business owners and vulnerable groups, such as by revitalizing debt restructuring programs within the financial sector, and to significantly enhance monitoring functions related to financial consumer protection.
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