Financial Services Commission Chairman Lee Eok-yeon acknowledged shortcomings in existing banking
Financial Services Commission Chairman Lee Eok-yeon acknowledged shortcomings in existing banking security systems during an October 8 parliamentary audit, telling the National Assembly’s Political Affairs Committee that basic defensive measures require a complete overhaul. Opinionnews.co.kr reported the session, where regulators faced intense scrutiny over artificial intelligence hacks, household debt caps, and losses from exchange-traded funds using borrowed capital.
South Korea Uses AI to Block Agent Attacks
Recent artificial intelligence agent attacks exposed vulnerabilities in South Korea’s financial sector defense infrastructure. Responding to inquiries from Social Democratic Party lawmaker Han Chang-min, Lee admitted that current operational protocols remain extremely deficient and require urgent revision. “To block AI attacks, we ultimately have no choice but to use AI,” Lee said during the hearing, as reported by Opinionnews.co.kr. Financial regulators are reviewing phased and effective improvements to network separation regulations to bolster innovation alongside security. Balancing rule relaxation with structural defense remains a core challenge as institutional cyber threats mount across the banking sector.
Mortgage Loan Caps Curb Seoul Apartment Price Acceleration
Lawmakers clashed over the tangible effectiveness of strict household lending regulations as Seoul apartment prices maintain an upward trajectory. Ruling People Power Party lawmaker Shin Dong-wook questioned the utility of ongoing caps during the audit. Lee defended the policy stance, telling the committee that market conditions would likely be far more severe without intervention. The Commission restricted maximum mortgage loans to 600 million won to curb price acceleration driven by high-end properties in districts like Gangnam. While maintaining a strict household debt management stance, the agency plans to balance selective support for genuine homebuyers with targeted housing supply financial assistance.
Investor Protection and Vulnerable Sector Support
Lawmakers pressed financial authorities regarding single-stock exchange-traded funds that use borrowing and the resulting individual investor exposure. Responding to questions from People Power Party lawmaker Park Jun-tae concerning the origin of the product’s introduction, Lee clarified that enforcement decree amendments fall under Commission jurisdiction after gathering broad industry feedback. Addressing an overseas investment banking report citing roughly 54 trillion won in personal investor losses, Lee characterized the figures as unofficial and inaccurate market commentary. “Regardless of the necessity of policy introduction, I feel remorse for resulting losses, concerns, and damages inflicted,” Lee stated.
The regulatory chief outlined expanded financial safety nets for vulnerable populations during his opening remarks. Plans include lowering policy-based microloan interest rates, launching specialized credit products, and utilizing debt adjustment mechanisms for distressed borrowers. Additional initiatives involve youth asset-building programs, specialized credit evaluation models for small business owners, and scaling up the National Growth Fund from 150 trillion won to 200 trillion won while accelerating digital asset legislation.