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| Financial Supervisory Service Governor Jeong Eun-bo arrives at the FSS headquarters in Yeouido, Seoul, Friday. Yonhap |
By Lee Kyung-min
Korea should brace itself for a "perfect storm" of the economy spiraling out of control due to a mixture of financial risks from corporate and individual insolvencies and asset price bubbles brought on and exacerbated by the pandemic-triggered expansionary government policies, the country's top financial supervisor said Friday.
Financial Supervisory Service Governor Jeong Eun-bo said that the economic and financial conditions are far from warranting a drawdown in emergency relief packages with the recovery in the real economy still being distant, a challenge compounded by the need to curb the rapid rise in debt in the private sector.
"The COVID-19 pandemic has yet to be overcome," Jeong said at his inauguration ceremony in the FSS headquarters in Yeouido, Seoul.
Excessive liquidity in the market pumped in as part of quantitative easing and low-interest rates around the world are emerging as new risk factors in the financial market, he added.
"I feel a heavy responsibility to lead the organization amid these heightened economic and financial risks from within the country and around the world."
The FSS under his leadership should redefine its organizational objectives and place greater emphasis on the law and principles, a foundation for the institution's supervisory function to help bolster financial market stability, sound management of financial firms and financial consumer protection, he stressed.
The pursuit of those goals, in his view, should be backed by upholding procedural compliance as well. Also to be strengthened are preventative regulatory measures, as opposed to disciplinary ones, an approach he considers more effective not only in seeking cooperation with the parties involved, but also in enhancing consumer protection.
"Providing guidelines and timely supervision are desirable for preventing financial crimes and unforeseen incidents. Through balanced supervision, we can make efforts toward outcomes defined by faith in the financial markets," he added.
Greater efforts are needed to protect financial consumers better, he noted, ahead of the implementation of the Financial Consumer Protection Act in September.
"We should continue our communications with financial companies over whether they are experiencing any difficulties in compliance with the new regulations and help resolve them."
Chung is the first former civil servant-turned-FSS governor under the Moon Jae-in administration. He played a key role in weathering the global financial crisis in 2008 as the international financial policy bureau director at the finance ministry. He served as Financial Services Commission vice chairman.
