South Korea minister details ‘financial services reforms’
The chairman of South Korea’s Financial Services Commission, who has previously spent time in the UK as a diplomat with the Korean Embassy in London, has taken the unusual step of detailing his country’s recent reforms to its financial sector in a comment piece published yesterday on the website of the Wall Street Journal.
“Since March of 2015, South Korea’s Financial Services Commission has sought to reform the country’s financial sector, with a goal to promote competition and innovation,” Yim Jong-yong, pictured, who is also a former chairman and chief executive of the Seoul-based NongHyup Financial Group, writes in his 635-word piece.
“The FSC’s efforts have already begun to alter the way Koreans use financial services.
“Switching bank accounts has become as easy as just a few clicks on a computer. The Individual Savings Account was introduced to enable more tailored wealth management. The first ever Internet-only banks will be a game-changer in the Korean banking sector.”
Yim goes on to explain that such changes were made possible by changes made first at the regulatory level, beginning with a fundamental shift in approach from “being coaches that direct every move” to “re-defin[ing] our role as referees that ensure fairness in competition”.
Regulations have also been streamlined and “supervisory practices improved”, he added, describing how, having been the chief executive of a private-sector financial holding company, he had “firsthand experience” of the burdens of South Korea’s previous regulatory regime. It used to contain “more than 700” what he called “quasi-regulations”, but now, “only 50 necessary ones remain, which we are working to legalise,” he wrote.
The country is also working on efforts to boost its capital markets, in an effort, Yim says, to allow more funds to be channeled into “innovative start-ups”, and is working hard to catch up in the area of financial-technology, an area he admits Korea “was late in addressing”.
Yim goes on to detail how the reforms have begun to yield results, as businesses “are growing to trust our strong commitment to reform”.
Yim ends his piece by telling readers not to be surprised “if today’s reforms in South Korea become tomorrow’s international gold standard”.
To read Yim’s comment piece in full on the Wall Street Journal‘s website, click here.
While Yim’s comments may have been aimed at foreign investors, at least one South Korean journalist remained unimpressed.
Nam Hyun-woo, of The Korea Times, wrote that “Chairman Yim Jong-yong’s contributed article” to the Wall Street Journal was “full of self-compliments”, and likened it to a fortune cookie, “which does not have a filling inside but instead contains a piece of paper with a vague optimistic prophecy that few believe has any actual basis”.
Readers of The Korea Times and other news media covering Korea’s economy, he added, “may notice that Yim’s cookie is missing something critical ― there’s not a single mention of the sweep of corporate restructuring that holds the fate of a number of companies that have driven the country’s economy for decades”.
To read Nam’s piece, click here.