[한국방송/김주창기자] The financial authorities have begun full-fledged discussions on how to authorize additional new banks and allow non-banks to enter the market in order to prevent the negative effects of commercial banks from becoming oligopolistic.
The Financial Services Commission and the Financial Supervisory Service announced on the 3rd that they held the first meeting of the working group on management, business practices and system improvement in the banking sector presided over by Vice Chairman Kim So-young of the Financial Services Commission and discussed detailed tasks to promote competition and structural improvement in the banking sector.
Vice Chairman Kim So-young of the Financial Services Commission is discussing matters related to promoting competition and structural improvement in the banking sector at a TF meeting on management, business practices and system improvement in the banking sector held at the Seoul Government Complex in Jongno-gu, Seoul on the afternoon of the 2nd. (Photo = Financial Services Commission)
Additional authorizations for new banks include small licenses, introduction of small specialized banks, additional authorizations for internet-only banks, regional banks, and commercial banks, conversion of savings banks to regional banks, and conversion of regional banks to commercial banks.
In order to promote competition between banks and non-banking sectors, credit card companies are permitted to pay for credit card companies, securities companies are allowed to pay for corporations, insurance companies are allowed to operate concurrently, banks are increasing their share of mid-term loans and microfinance, and non-bank policy fund loans and policy mortgages are allowed. We discussed expanding the scope of work.
It was decided to discuss later the tasks to promote competition within the banking sector, such as comparing and recommending deposits and establishing a refinancing loan platform.
Vice Chairman Kim So-young, who presided over the meeting, said, “In the case of new player entry tasks, it is necessary to review the effectiveness aspect as well, such as whether there is an entity that wants to enter.” It is a matter that needs to be comprehensively reviewed from the perspective of financial stability and consumer protection.”
It was also decided to consider expanding the scope of business in the non-banking sector only to financial companies with sufficient soundness and liquidity and a well-equipped consumer protection system.
“It is necessary to take into account that allowing the issuance of real-name accounts for virtual assets is more problematic in terms of financial stability, such as the expansion of the possibility of money laundering, than promoting competition,” said Vice Chairman Kim.
In addition, he added, “Please be prepared to discuss the need to allow discretionary work to strengthen the bank’s customer asset management function, not as an issue to promote competition in the banking sector, but in the part of expanding non-interest income of banks, which will be dealt with later.”
In addition, the financial authorities plan to prepare alternatives by quickly examining the interest rate calculation system and performance compensation.
As for the interest rate calculation system, the development of indicators or products that can mitigate the rise in lending rates in case of an excessive rise in market interest rates will be reviewed, and the current interest rate calculation system will be reviewed to see if there are any elements that restrict competition.
In terms of performance compensation, institutional improvements are promoted, such as ‘Say-on-pay (shareholders’ voting rights for executive compensation)’, ‘Claw-back (recovery of bonuses)’, and strengthening the functions of the Remuneration Committee.
Regarding the payment of performance bonuses, each bank plans to examine the adequacy of performance indicators and performance measurement methods together with the banking sector to discover areas for improvement.
Inquiries: Financial Services Commission Banking Division (02-2100-2954), Financial Supervisory Service Banking Supervision Bureau (02-3145-8022)
