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The Financial Supervisory Service Governor Lee Bok-hyun speaks during an event held in Seoul on Monday. (Yonhap) |
Lee Bok-hyun, head of South Korea’s Financial Supervisory Service, reaffirmed his commitment to resolving ongoing issues, including real estate project financing risks and overhauling the short-selling system, and pledged to accelerate the digitization of finance during the remainder of his term.
"Reflecting on the past two years, despite the challenges posed by rising inflation and interest rates, I believe we worked tirelessly to achieve stable financial conditions and foster compassionate livelihood finance," Lee said at a press conference marking his second year in office. "Building on the foundation we have laid, I intend to dedicate the rest of my term to envisioning a promising future for our financial sector."
Lee's foremost task is to stabilize lingering uncertainties, including delinquencies in real estate project finance loans. Despite the government's efforts to ensure a soft landing for domestic PF loans, rumors of a crisis have persisted, reflecting public fears that the situation could spread to the overall financial industry.
"These rumors have continued because there wasn't a fundamental solution to the real estate crisis," Lee said. "With the recently announced real estate PF normalization measures, we are now working to reduce the concentration on specific assets, including those from past real estate expansions."
Lee anticipates that these rumors will dissipate by the end of the year.
"Once the lingering issues are somewhat resolved in the second half of this year, we will also highlight issues related to alternative investments, aiming to revitalize the capital market and ensure that capital is directed towards more productive areas," he added.
While continuing support for the government's market enhancement drive, the regulator also gave a heads up to a heated debate for various related tax reforms in the latter half.
"Whether it's the financial investment income tax, corporate tax, dividend tax, or inheritance tax, all of them impact the capital market, and the FSS cannot but express our views on these matters," he remarked.
Emphasizing his commitment to normalizing currently halted short selling trading, Lee stated, "We will boost investor confidence by computerizing and reforming the short selling system. Additionally, we will take stricter measures against financial fraud and unfair trading to establish a sound and fair financial order."
Under Lee's leadership, the FSS has conducted an unprecedentedly comprehensive review of the country's illegal short selling practices and initiated the computerization of a monitoring system for illegal acts. The new system is set to be established within the next six months before Lee leaves office.
Lee also prioritized advancing the digital financial environment to adapt to critical changes like digitalization and demographic shifts.
"While supporting the successful implementation of the virtual asset law, which will take effect next month, we will thoroughly prepare for artificial intelligence technology and network separation to drive innovations in our financial market," Lee stated.
The FSS chief has also continued his efforts to promote the Korean market to global investors holding meetings with investors and foreign regulatory bodies in New York last month.
Speaking about his meeting with the US Securities and Exchange Commission held during the trip, Lee said he confirmed a strong mutual commitment for cooperation in financial fields, including virtual assets.
"Given that most financial regulations regards to capital market and virtual assets happen cross-border, there is a growing need for reciprocal international cooperation. And since they are not based on obligations, these cooperative efforts are based on favors. ... Especially in regards to virtual asset regulation, I felt there is a strong need for Korea's cooperation (with the US)."
