Ahn’s priority ― support start-ups, protect consumers

Independent presidential candidate Ahn Cheol-soo has drawn up a list of potential reforms and policies for the Korean financial market with the priority given to boosting start-ups, protecting consumers and helping credit delinquents to get back on their feet.

The Ahn camp’s reform plans revealed Sunday also include restructuring and overhauling the Financial Supervisory Commission, Korea’s financial regulatory and policymaking body that has been highly criticized for failing to monitor and prevent a number of savings banks mainly serving low and mid-income groups from malpractice and collapse.

Ahn’s top priority is introducing a variety of funding sources for start-ups and entrepreneurs by increasing the funds managed by state-run Korea Venture Investment and crowd-funding.

Also, the reform policy paper suggested that Ahn will revitalize the merger and acquisition market where start-ups can seek potential strategic buyers or sellers for growth, equivalent to the way companies work in Silicon Valley in the U.S.

Ahn, who is widely known for starting the computer vaccine program developer AhnLab, has been the proponent of start-ups and entrepreneurship as they along with small- and medium-size companies are the “true” driver of economic and job growth contrary to popular belief of conglomerates leading the economy.

Also, the independent camp will face the challenge of privatizing Woori Financial, which has been stalled over the years due to political obstacles and a high price. Ahn did not give any details on this plan, which has been sought since Woori had been revitalized with an injection of taxpayers’ money amid the height of the Asian currency crisis.

The government has failed to find local suitors for Woori mainly due to its high valuation, which can only be paid possibly by foreign financial firms. But Korea is reluctant to give one of the last remaining local banks such as Woori to foreigners.

Ahn also will seek to boost regional banks that can tend to the needs of local low and mid-income customers. Thus, he aims to spin-off and privatize Kwangju Bank and Kyongnam Bank, which are wholly-owned subsidiaries of Woori Financial.

FSC will be restructured and dismantled with its financial regulatory policymaking unit to be handed over to the Ministry of Strategy and Finance. Its supervisory operating unit, the Financial Supervisory Service, will be heading the monitoring role.

The Bank of Korea, whose primary role is taming inflation, will further be given the independence to manage the foreign exchange markets and reserves as well as coordinate monetary policies in cooperation with the Finance Ministry and the FSC.

This is in line with efforts to boost their capability in supervision and management to increase consumer protection, detect future financial crisis and prevent bank runs or collapses.

By Park Hyong-ki (hkp@heraldcorp.com)