Annual Work Plan - Financial Services Commission

Annual Work Plan

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Feb 07, 2024

2024 Work Plan

Vision A caring and reliable finance, standing by the people. 3 Key Objectives A credible finance, safeguarding peoples livelihood. A robust finance, capable of withstanding risks. A dynamic finance, propelling growth into the future. 9 Policy Tasks Credible finance 1) (Peoples livelihood) Reduce the burden of high financing costs for the public. 2) (Fairness in market) Build a fair ladder of opportunity in capital markets. 3) (Safety and protection) Prevent financial crimes and strengthen consumer protection. Robust finance 4) (Property market risk) Support an orderly normalization of the project finance market. 5) (Household debt) Ensure a stable management of household debt growth. 6) (Market stability) Eliminate risk factors and strengthen response capabilities. Dynamic finance 7) (Support for growth) Support businesses to growth and regions to develop. 8) (Financial innovation) Seek responsible innovation to boost competitiveness. 9) (Preparing for future) Cultivate future growth drivers and prepare for future changes. A credible finance, safeguarding peoples livelihood 1) (Peoples livelihood) Reduce the burden of high financing costs for the public. - Alleviate the burden of high interest payments for the self-employed and small merchants through (a) an interest refund program worth KRW2 trillion-plus offered by the banking sector, (b) the interest rate support for loans from the nonbanking sector that have interest rates between 5 to 7 percent, (c) an expansion of low interest rate refinancing support offered by Korea Credit Guarantee Fund, and (d) an expanded scope of eligibility for New Start Fund, a debt adjustment program for the self-employed and small merchants. - Work to ease interest rate burden in more systematic ways by expanding the operation of the online loan transfer service and making improvements to the interest rate disclosure system in the banking sector. - Ensure the provision of support for vulnerable borrowers by setting up an online tot
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Feb 01, 2023

2023 Work Plan

The FSC presented its annual work plan for 2023 on January 30. This years work plan includes twelve specific policy items under the initiatives of (a) ensuring strong financial market stability, (b) strengthening the role of finance to shore up the growth of the real economy and peoples livelihoods and (c) promoting the advancement of the financial industry into a high value-added strategic sector. Key Details of 2023 Work Plan Ensuring Financial Market Stability will preemptively respond to financial market risk factors Financial markets in Korea are, despite continuing uncertainties at home and abroad, on a stable recovery path backed by the KRW50 trillion-plus market stabilization measures and strong policy cooperation amog relevant authorities. In this regard, authorities will continue to work on the following: a) Ensure market stabilization utilizing over KRW40 trillion of the remaining capacity of the market stabilization programs. - Flexibly adjust the eligibility and size of the support in accordance with market situations. Authorities will widen the pool of eligible recipients and increase the maximum valueof bonds supported by the P-CBO (primary collateralized bond obligation) program (KRW5 trillion) in order to relieve businesses even with unfavorable credit ratings from difficulties in corporate bond issuance. b) Seek flexible and creative policy solutions, in responding to current crisis situation, that are not bound by the past crisis-handling experience and appropriate for current market situations. - Mobilize all available resources and capabilities in financial sectors to respond to the crisis by maintaining close cooperation with financial institutions, as well as relevant ministries. II. Authorities will thoroughly manage risks linked to real estate market a) Spare no effort to ensure a soft-landing of the real estate market as a countermeasure against a potential weakening of the real estate project finance (PF) which is considered as the biggest
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Dec 22, 2021

2022 Work Plan

The FSC announced its work plan for 2022 which will be focused on maintaining stability in the financial system, promoting advancement of the financial industry, supporting an overall growth of the economy and boosting financial inclusion. In order to achieve these goals, the FSC plans to (a) preemptively manage financial imbalances and work on an orderly exit and normalization from the pandemic-era policy, (b) seek innovation in the regulatory framework to promote digital transformation in the financial industry, (c) provide support for structural changes taking place in the economy and (d) ensure tailored support for vulnerable groups and enhance consumer protections. Key Achievements in 2017-2021 I. Stability in the Financial System The FSC has worked to maintain stability in the financial system by pursuing a consistent policy on household debt management and preemptively responding to the COVID-19 pandemic. In terms of household debt management, the pace of the household debt growth that has seen acceleration in 2020 has come down to a stable level in the second half of 2021 with improvements also seen in the quality of debt structure. The FSC has established groundwork for stably managing potential debt-related risks in the future. In response to the COVID-19 pandemic, the FSC has made available financial supports through the KRW175 trillion-plus support programs intended to help SMEs and small merchants as well as suppliers in the key industry sectors. II. Broadened Horizon of the Financial Industry The FSC has helped expand the horizon of the financial industry by promoting competition as well as convergence between different sectors. Through regulatory improvements, the FSC has lowered entry barriers for different types of financial companies and fintech firms and promoted innovation and digital transformation in the financial industry by introducing open banking and MyData services as well as an integrated public-sector financial open data platform. III. P
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Jan 19, 2021

2021 Work Plan

The FSC unveiled its work plan for 2021 on January 18, highlighting the four areas of policy tasks as follows(a) maintaining the COVID-19 financial support and managing potential risks, (b) supporting K-New Deal initiatives for a green and digital economy, (c) promoting financial innovation and digital finance and (d) strengthening financial consumer protection and support for vulnerable groups. KEY ACHIEVEMENTS IN 2017-2020 A. STEADY MAINTENANCE OF FINANCIAL STABILITY AMID COVID-19 PANDEMIC Over the past four years, the FSC has focused on maintaining stability in the financial system as its utmost policy priority. In the wake of the COVID-19 pandemic, the FSC responded by quickly drawing up and providing financial support packages worth KRW175 trillion-plus and worked to prevent the crisis from spreading further into the financial markets. B. SUCCESSFUL CHANNELING OF FUNDS TO PRODUCTIVE SECTORS The FSC has worked to expand the supply of capital into more productive sectors by introducing innovative ways to assess corporate credit and through revisions to the relevant capital markets rules. In addition, the public sector has provided equity-based funding sources via growth ladder fund and other government-backed financing channels. C. ACTIVE PROMOTION OF COMPETITION AND INNOVATION IN FINANCIAL INDUSTRY The FSC has granted new business licenses to internet-only banks, insurance firms and real estate trust companies based on an industry-level competition assessment. In order to promote and expand financial innovation, the FSC has also worked to establish the necessary infrastructures, including the regulatory sandbox, open banking and MyData in financial services. D. ENHANCED INCLUSIVENESS VIA MICROFINANCE SUPPORT AND CONSUMER PROTECTION The FSC has worked to reduce the interest payment burdens of lower income households by lowering the maximum interest rate that can be charged on loans from 24% to 20%. E. IMPROVED FAIRNESS BASED ON RULES AND PRINCIPLES The FSC has al
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Feb 17, 2020

2020 Work Plan

The Financial Services Commission along with other economic ministries presented the 2020 Work Plan on February 17, 2020. The FSC has outlined 10 key policy tasks for this year, which include a) redirecting capital flow toward SMEs and start-ups with innovative technologies and future growth potential, b) working on bold reforms in financial regulations while fostering convergence between new technologies and finance, and c) promoting inclusive finance and establishing a reliable financial safety net to support a comeback for those who have been discouraged by failed business attempts.The following are some of the key achievements so far in the areas of financial innovation.► Outstanding balance of movable asset lending by local banks doubled from KRW800 billion at the end of 2018 to KRW1.6 trillion by the end of 2019.► Outstanding balance of loans to SMEs by local banks increased from KRW610 trillion at the end of 2016 to KRW747 trillion by the end of 2019.► Number of newly listed companies on the KOSDAQ market rose from 82 to 108 between 2016 and 2019.2020 FINANCIAL POLICY TASKS1. REDIRECT CAPITAL FLOW TOWARD BUSINESSES FROM HOUSEHOLDS REAL ESTATES► Prevent capital concentration in the real estate market and introduce a new loan-to-deposit ratio which will encourage more corporate lending by financial companies.2. PROVIDE TARGETED SUPPORT TO 1,000 INNOVATIVE FIRMS► Select 1,000 innovative firms through a government-wide cooperation with other ministries and provide both financial and non-financial assistance in the amount of KRW40 trillion.3. ALLOW DIVERSE TYPES OF ASSETS TO BE USED AS COLLATERAL► Push for a revision of the Act on Security over Movable Property, Claims, etc. to introduce a lump-sum collateral system through which companies are able to collateralize a diverse set of assets including machinery, raw materials and inventory, and set up a movable collateral registry which will help collect collaterals and non-performing loans on behalf of f
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Mar 07, 2019

2019 Work Plan

The FSC laid out a financial policy roadmap for 2019 aimed at promoting financial innovation, ensuring trust in finance and securing financial stability.► Financial innovation will be accelerated as the newly-enacted laws on online-only banks and financial regulatory sandbox take effect this year. Finance will also play an active role in financing SMEs and start-ups to boost economic vitality.► The FSC will establish a consumer-oriented system in which consumers are better informed and protected. The FSC will ensure fairness and transparency to protect investors and shareholders.► The FSC will remain vigilant against potential risks with close monitoring on financial markets and active policy responses.Key policy tasks1. Financial support to boost economic vitality► The government will provide a total of KRW 4.6 trillion in government-backed loans and loan guarantees for small and medium-sized shipbuilders, equipment and auto parts manufacturers.► The government launched in January a financial support program of KRW 15 trillion over the next three years to support SME’s investment in equipment, environmental safety facilities and business reshuffling.► The FSC will overhaul financing mechanisms to enable start-ups and SMEs to borrow or raise funds based on their growth potential.2. Financial stability and pre-emptive responses► The government will continue its policy efforts to curb household debts. Last year, household debt growth slowed down to 5.8%, the lowest since 2013. The government aims to keep household debt growth this year at the similar level – above 5% to below 6%. The debt service ratio (DSR), first introduced in the banking sector in October 2018, will be adopted in the non-banking sector as well in the second quarter of this year.► The government will preemptively manage corporate debt risks with enhanced evaluation system for credit risks and market-driven corporate restructuring.► The FSC will establish a regulatory and superv
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Jan 15, 2018

2018 Work Plan

The FSC announced its financial policy roadmap for 2018 outlining financial policy plans to promote innovation in finance and support innovation-led, sustainable growth for the Korean economy. We put our focus on the following four key policy tasks:- trustworthy finance with financial reforms and fair market order- productive finance to support innovation-led growth for the Korean economy- inclusive finance to better serve those underserved or marginalized- innovative finance to promote competition and innovation in financial servicesPolicy FocusI. Trustworthy financeThe FSC will continue our reform efforts across the financial sector to regain the public’s trust in finance. Financial regulators will take the lead with more transparency and credibility in our regulatory practices. We will work together with financial institutions and other market participants to reform improper business practices and ensure fair market order.► Better governance in financial institutionsThe FSC will improve governance in financial institutions to ensure transparency in CEO succession procedure; expertise and independence of external directors; and active participation of minority shareholder. Details will be announced in February.► Consolidated supervision on ‘financial conglomerates’The FSC will introduce a consolidated supervisory system on the so-called financial conglomerates, corporate groups with financial affiliates of over KRW 5 trillion in more than two sectors – e.g. insurance and securities, etc. The new supervisory scheme is designed to manage soundness and risk of financial affiliates at the group level in a systematic and consolidated manner. Details will be announced in February.► Advancement in corporate governanceThe FSC will devise policy and regulatory incentives to encourage further adoption of stewardship code by institutional investors. Mandatory disclosure of corporate governance reports will be phased in for listed companies, starting with large
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Jan 05, 2017

2017 Work Plan

The FSC outlined its financial policy direction for 2017, focused on (i) prompt and thorough response to financial market risks; (ii) financial support for stabilization of household livelihood; and (iii) financial reforms and innovation to revitalize the economy.I. Prompt and thorough response to financial market risks Financial market stability- The FSC will closely monitor financial markets to keep risk factors under control through a 24-hour emergency response system.- Measures will be taken to stabilize corporate bond market to ensure stable funding conditions for companies in response to increased volatility in financial markets. Household debt management- Guidelines on stricter screening of loan applications will be expanded to all financial institutions to make sure borrowers take loans that they can afford and repay in installments.- The FSC will set out a roadmap in the first quarter of 2017 for improved standards for screening a borrower’s creditworthiness - e.g. gradual introduction of debt service ratio (DSR) as a tighter standard to assess a borrower’s debt repayment ability. Corporate restructuring- Corporate restructuring will be carried out under consistent principles that emphasize a troubled company’s self-rescue efforts and burden sharing.- A new framework for corporate restructuring (‘Pre-packaged Plan’), which combines advantages of creditor-led debt workout and court-led rehabilitation, will be promoted to expedite business normalization of a troubled company. Sound financial market practice- The FSC will promote more transparency in corporate management and financial transactions by improving the current accounting and audit system, encouraging the introduction of ‘stewardship code’ to a wider range of companies and establishing sound financial market practice.II. Financial support for stabilization of household livelihood Microfinance support for low-income borrowers- The government will increase its injection of
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Feb 02, 2016

2016 Work Plan

The FSC outlined its financial policy roadmap for 2016, focused on two main themes: Financial Reform and Financial Stability. The FSC will speed up the implementation of financial reform to promote competition and innovation in the financial sector, while strengthening financial stability in response to internal and external risks.Ten key policy tasks were laid out to push forward financial reform and financial stability:- financing innovative businesses to support the creative economy;- encouraging cultural changes in financial institutions;- promoting the financial industry as new growth driver;- enabling more convenient and innovative financial services;- supporting the growth of household wealth;- managing potential risks of household debt;- managing corporate default risks preemptively;- ensuring stability and fairness in financial markets;- expanding policy support for microfinance; and- strengthening financial consumer protection.1. FINANCING INNOVATIVE START-UPS AND VENTURE COMPANIESThe FSC will further stimulate investments in tech start-ups through tech investment funds worth KRW 750billion. We will continue to make our policy efforts to help the newly-introduced crowdfunding system take root as a fundraising channel for start-ups and venture companies. We will push forward the restructuring of the KRX into a holding company in an effort to bring more competition into the local bourse system. The KOSDAQ and KONNEX will be also reformed to attract more listings. The roles of policy banks such as IBK and KDB will be realigned to provide policy loans and state-backed guarantees for start-ups and SMEs in accordance with their growth cycle.2. ENCOURAGING CULTURAL CHANGES IN FINANCIAL INSTITUTIONSWe will continue our reform of financial supervisory practice and regulation to ease regulatory burden on financial institutions and encourage more private initiatives in the financial sector. Financial institutions will be also required corresponding changes in their c
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Jan 29, 2015

2015 Work Plan

The FSC announced its financial policy direction for the year of 2015 with three key policy goals and nine tasks.Creative FinanceInitial achievements in creative finance spread widely across all financial sectors- Facilitate the convergence of IT and financial sectors to promote the ‘Fintech’ industry- Strengthen the intermediary role of finance to support the real economy by encouraging investments by venture capital- Continue financial regulator y reform to strengthen competitiveness of Korea’s financial sectorConsumer TrustConsumer trust in the financial sector for further growth of the financial services sector- Improve the financially-marginalized’ access to financial services and expand supportive programs- Strengthen financial consumer protection by improving inconvenient practice in financial services- Restore consumer trust in the financial sector with establishment of ethics guidelines of the sectorFinancial StabilitySecure financial stability to support a strong recovery of Korea’s economy- Preemptively respond to potential risks of household debt- Conduct corporate restructuring in a preemptive manner on a year-round basis- Ensure financial stability against risk factors home and abroadKEY POLICY ACHIEVEMEN TS IN 2013 AND 2014For the last two years since the launch of the Park Geun-hye administration, the FSC has been committed to laying the groundwork for creative finance to promote innovation and competition in the financial sector.Technology financeThe FSC established infrastructure for tech finance such as technology data base(TDB) or technology credit bureau(TCB )1 to support financing of innovative tech fims. For six months since the ‘tech finance’ initiative took off, provision of technology-secured loans amounted to a total of KRW 8.9trillion in 14,413 cases. Interest payment burden reduce d 0.4%p with tech loans.Financial regulatory reformAs part of the government’s regulatory reform initiative, the FSC reviewed all statutory and
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