Daeyong Kwon: "Financial Sector Must Systematize Investments for Success of Productive Finance"

Financial Services Commission Holds "Productive Finance Council for the Financial Sector"
Vice Chairman Daeyong Kwon: "Success Is Essential for Korea's Great Leap Forward"

Daeyong Kwon, Vice Chairman of the Financial Services Commission.

The government has convened executives from financial institutions that have announced hundreds of trillions of won in investments for productive finance, urging them to refine and systematize their investment plans to ensure the policy's success.

The Financial Services Commission announced that it held the "Productive Finance Council for the Financial Sector" on the morning of January 21 at the Government Complex Seoul in Jongno-gu, Seoul. The meeting was attended by executives in charge of productive finance from KB Financial Group, Woori Financial Group, iM Financial Group, Korea Investment & Securities, KB Securities, Hanwha Life Insurance, Samsung Fire & Marine Insurance, Korea Development Bank, and Industrial Bank of Korea.

Daeyong Kwon, Vice Chairman of the Financial Services Commission, who presided over the meeting, stated, "Productive finance is not the familiar old path of collateral and guarantees, but a major shift in financial flows toward high-tech industries, startups and ventures, and local regions," emphasizing that it is "a core policy for Korea's great leap forward."

Vice Chairman Kwon expressed his gratitude for the financial institutions' participation in expanding productive finance and requested, "Please establish a management system that can systematically classify, inspect, and share whether the plans announced and shared by financial institutions are truly leading to productive finance."

He then outlined several necessary actions for the successful execution of these plans. First, he explained, "Productive finance becomes possible when the financial sector can independently assess the future value of industries and companies, such as their technological capabilities and competitiveness, rather than relying solely on collateral, guarantees, or performance-based evaluations. This requires strengthening internal capabilities, for example through organizations dedicated to industry research."

He further mentioned, "It is necessary to redesign the overall personnel, organizational, and performance management systems, including key performance indicators (KPIs) and risk-sharing structures for investments, so that productive finance becomes an organization-wide objective rather than the responsibility of only certain departments or individuals."

The financial institutions gathered on this day shared their efforts to reform organizational and performance management systems for productive finance, as well as examples of cooperation with local governments.

Financial holding companies announced a plan to invest 584 trillion won in productive finance. KB Financial Group stated that it has established and reorganized productive finance organizations within the holding company and its major subsidiaries, and has improved branch evaluation and business support systems. During the quarter, it also plans to successfully arrange financing for the Shinan-Uido offshore wind power project and the Yongin Semiconductor Cluster development project.

Woori Financial Group shared that it completed the creation of a 200 billion won group joint investment fund in December last year, and that its asset management subsidiaries have also established funds totaling approximately 520 billion won.

Securities companies supplemented the support plans prepared at the end of last year and shared a plan for seven large securities firms (with equity capital of 4 trillion won or more) to supply 22.5 trillion won in venture capital over the next three years, as they are obligated to provide such capital. In the insurance sector, 24 companies have prepared plans to support productive finance totaling 36.6 trillion won. The Financial Services Commission announced that, to support insurers, it is reviewing regulatory improvements such as policy funds, infrastructure, venture investment, and adjustments to risk weights related to mortgage loans in the insurance sector.