‘Let’s stop the bank oligopoly’… Financial authorities discuss approval of new banks and entry into non-banking sectors

[한국방송/김주창기자] The financial authorities have started full 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 becoming oligopolies.

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 chaired by Vice Chairman Kim So-young of the Financial Services Commission and discuss detailed tasks to promote competition and structural improvement in the banking sector.

Vice Chairman Kim So-young of the Financial Services Commission discusses issues 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 Canolfan Seoul Government in Jongno-gu, Seoul on the afternoon of the 2nd. (Photo = Financial Services Commission)

Additional authorizations for new banks include small licences, introduction of small specialist banks, additional authorizations for internet-only banks, regional banks, and commercial banks, conversion of savings banks into regional banks, and conversion of regional banks into commercial banks.

To promote competition between banks and non-banking sectors, credit card companies are allowed to pay for credit card companies, securities companies are allowed to pay for corporations, insurance companies are allowed to operate simultaneously, banks increase their share of the middle term loans and microfinance, and non-bank policy fund loans and policy mortgages are allowed. We discussed expanding the scope of the 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, the effectiveness aspect also needs to be reviewed, such as whether there is an entity that wants to enter.” is an issue that needs to be comprehensively reviewed from a financial stability and consumer protection perspective.”

It was also decided to consider expanding the scope of business in the non-banking sector only to financial companies with adequate soundness and liquidity and a well-equipped consumer protection system.

“It needs to be taken into account that allowing the issuance of real name accounts for virtual assets is more problematic in terms of financial stability, such as expanding the possibility of money laundering, than promoting competition,” said Vice Chairman Kim.

In addition, he added, “Be prepared to discuss the need to allow discretionary work to strengthen the bank’s customer asset management function, not as a matter of promoting competition in the banking sector, but in the area of ​​expanding non-interest income from banks, which will be addressed later.”

In addition, the financial authorities intend to prepare an alternative by quickly examining the interest rate calculation system and performance compensation.

In terms of the interest rate calculation system, the development of indicators or products that can mitigate the increase in lending rates in case of an excessive increase in market interest rates will be reviewed, and the current interest rate calculation system will be reviewed to see if there is. are any elements that restrict competition.

In terms of performance compensation, organizational improvements are promoted, such as ‘Say on pay (shareholder voting rights for executive compensation)’, ‘Recovery (recovery of bonuses)’, and strengthening the functions of the Remuneration Committee.

In terms of paying performance bonuses, each bank intends to examine the adequacy of performance indicators and performance measurement methods together with the banking sector to discover areas for improvement.

Enquiries: Financial Services Commission Banking Division (02-2100-2954), Financial Supervisory Service Banking Supervision Office (02-3145-8022)


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