Financial watchdog chief stresses principle-based supervision

South Korea's financial watchdog will conduct its supervisions based on principle and also cut the number of routine examinations, its chief said Thursday, in a bid to restore confidence in the country's financial sector.

Speaking at a breakfast meeting with heads of foreign financial firms operating here, Jin Woong-sub, governor of the Financial Supervisory Service, said supervision would be principle-based rather than tied to a rigid system of regulations.

The number of routine examinations will be significantly reduced, and financial companies will be given as much discretion as possible in determining sanctions against their employees, Jin said.

The FSS has often been criticized for meddling deeply in business operations and internal affairs as it exercised its regulatory and disciplinary powers.  

During the meeting, the governor said the watchdog will put top priority on respecting and encouraging the autonomy and creativity of financial companies, while strengthening communication with the market.

The governor, at the same time, called on foreign financial companies to prioritize consumers so that they can maintain a mutually beneficial relationship with their clients.

Jin pledged support for active trade settlement in Chinese renminbi, including the opening of settlement accounts by domestic financial companies, saying that their participation is low because the system is still in its early stages.

China's Bank of Communications began operations in November as the clearing and settlement bank for cross-border transactions denominated in the Chinese currency.  

The governor asked the Chinese bank to develop a stable clearing and settlement system so that both service users and the provider can be satisfied. (Yonhap)