FSS focuses on axing rules restricting innovation

The Financial Supervisory Service has said it will promote the autonomy of foreign financial firms in Korea by reducing current examinations and limiting sanctions only to crucial rule violations.

This alleviated supervisory policy reflects the stance of the FSS governor, who sternly pledged to minimize the regulators’ interference in the market.

“The focus of examination will no longer be to uncover violations or to impose sanctions, but to help financial firms identify their problems and find valid solutions,” FSS Gov. Zhin Woong-seob said Tuesday.

The governor was delivering a speech at the opening session of FSS Speaks 2015, the seventh of an annual forum held by the financial regulator in an effort to better communicate with foreign financial companies operating in Korea.

“What this means is that there will be less frequent examinations but more intense ongoing monitoring on their soundness.”

It is important that each company should have the autonomy to internally deal with minor cases of rule violations, he added.

The event was held at Lotte Hotel Seoul, with 350 guests from foreign financial firms, credit rating agencies, and embassies attending, according to FSS officials.

“The know-how and creativity of foreign financial firms are needed in order to generate a reform drive and to revitalize the financial industry,” Zhin said.

“Our prime focus is to remove rules and practices that diminish their ability to innovate and create.”

The FSS chief quoted the recently-launched Financial Reform Inspection Team as an example of such efforts. The special task force will be making onsite visits this month to collect feedback on the current financial regulation and supervision system. The results will be delivered later to the Financial Reform Committee and will be reflected in the FSS’ upcoming reform actions.

Since his inauguration in November last year, Zhin has repeatedly expressed that the FSS should break from its conventional restrictive and authoritative stance ― one of the key factors that brought criticism upon his predecessor Choi Soo-hyun.

By Bae Hyun-jung (tellme@heraldcorp.com)