The South Korean financial authorities have come up with a task force so as to boost the banking sector’s business practises as well as its management.
Apparently, the task force includes members such as scholars and officials of the Financial Services Commission- FSC, Financial Supervisory Service- FSS as well as representatives from major financial industry associations.
Targeted to ease the burden of interest rate hikes on the public, the task force was formed in response to President Yoon Suk Yeol’s open criticism of banks’ market dominance and excess profits.
The authorities are looking to bolster the clawback provisions for executives of the banks and also allow shareholders the right to vote on the remuneration of executives.
This will also help enhance competition across the banking sector. The measures are most likely to improve the possibility of the launch of a small licence as well as a certification system for each separate function of lenders as well as challenger banks.
The Financial Services Commission’s vice chairman, Kim So-young, has been quoted as saying to one of the news publications that the banking sector happens to have an oligopoly structure since the entrance into the banking spectrum is limited by the government’s approval.
There have also been criticisms that banks roll-in higher profits due to rising rates of interest rather than giving out sufficient choices as well as differentiated customer services. As per Reuters, the panel will also be looking to mull action to push capital buffers to deal with external shocks.
According to Lee Bok-hyun, the FSS governor, by engaging in it, the banking industry in Korea will become more efficient as well as competitive, thereby making the Korean financial markets more attractive to investors. It is well to be noted that the FSS as well as the FSC co-convened the first task force meeting, and apparently specific measures are most likely to get outlined by June’s end this year.