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Jul 21, 2020
- FSC Chairman Holds Talks with Officials from Financial Companies, Big Techs and Fintechs
- FSC Chairman Eun Sung-soo met with officials from financial institutions, big techs and fintechs as well as academia on July 21, and held talks on ways to promote the advancement of Korea’s financial industry.The following is a summary of Chairman Eun’s remarks.The digital transformation taking place in the financial companies, big techs entering the financial services industry and the growth of fintechs are all expected to bring about change and innovation in our financial industry. As such, the traditional financial companies, big techs and fintechs should build mutual understanding and cooperative relations with each other.Big tech companies should always adhere to the principle of fair competition while respecting the regulations and the system built upon the existing framework of financial laws. Both big techs and fintechs should work to ensure financial data security and consumer protection while working to prevent conflict of interests with their nonfinancial service functions.The traditional financial companies should focus on improving consumer convenience and developing innovative ways to provide financial services. The government will support their efforts for innovation. On the issues concerning fair competition or regulatory arbitrage, the government is always willing to listen to constructive opinions and suggestions for solution.To level the playing field in the financial industry, the government will build foundations for fair competition by implementing fair and reasonable regulations, such as the financial regulatory sandbox program, while working for a balanced development between financial innovation, consumer protection, financial information security and data protection.The FSC will set up a joint public-private consultative body composed of officials and experts from the government, financial institutions, fintechs and big techs in the third quarter this year. The joint consultative body will discuss diverse issues including regulatory ref
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Jul 20, 2020
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Jul 17, 2020
- SPV to Start Purchasing Corporate Bonds and CP
- The government announced the official launching of the special purpose vehicle intended to support businesses facing liquidity problems by purchasing corporate bonds and CP on July 17.BACKGROUNDThe government, the Bank of Korea and the Korea Development Bank unveiled a joint plan for creating an SPV on May 20. Since then, the relevant institutions have worked toward the official launching of the SPV on July 14. In the meantime, the passage of the 3rd supplementary budget at the National Assembly enabled capital injection of KRW1 trillion to KDB. Between May 20 and July 13, the KDB purchased KRW300 billion worth of low-rated corporate bonds to help stabilize markets before the launching of the SPV. In addition, the Bank of Korea announced its decision to lend KRW8 trillion to the SPV on July 17.KEY DETAILS(SIZE) Up to KRW10 trillion made up of KRW1 trillion (10%) in equity capital from KDB, KRW1 trillion (10%) in subordinated loans from KDB and KRW8 trillion (80%) in primary loans from BOK, with the possibility of expanding the size up to KRW20 trillion(PERIOD) SPV’s bond purchasing program will be operated on a temporary basis for six months from July 14, 2020 until January 13, 2021, with the possibility of extension afterwards.(TARGETS) Investment grade corporate bonds and CP issued by nonfinancial companies with priorities given to low-rated companies (A~BBB ratings) and ‘fallen angels,’ BB-rated bonds downgraded from investment grades due to COVID-19-related factorsThe SPV is expected to help alleviate liquidity problems for many low-rated companies.* Please refer to the attached PDF for details.
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Jul 16, 2020
- FSC to Work on Enhancing Transparency in Financial Regulatory Environment
- FSC Chairman Eun Sung-soo presided over the 43rd financial hubs establishment committee meeting on July 16, and discussed ways to reassess the government’s financial hub policy following recent changes in market environments at home and abroad.The following is a summary of Chairman Eun’s remarks.The competition over the status of regional financial center in Asia has been accelerating. The Korean government has been pursuing its financial hub policy since it first unveiled the strategy in 2003 to turn Korea into a financial hub in Northeast Asia. However, due to increasing uncertainties in the global financial markets, financial companies have been reducing the number of overseas branches, and it has become more difficult to attract foreign based financial companies in Korea.Despite difficulties, it is important to regroup strategies based on the strength of our financial industry and renew our efforts. In this regard, the rising demand for asset management and growth in foreign investment continue to accelerate the globalization of the asset management industry. In addition, the rising demand for development finance in neighboring countries provides new opportunities for Korea through the government’s new northern and southern economic cooperation initiatives.Compared to other major financial centers in Asia, high corporate and income tax rates, lack of flexibility in labor markets and that of transparency in financial regulations have been pointed out as obstacles for Korea in becoming a major financial center in the region. From the perspective of macroeconomic management, the government’s capacity to change its tax or employment rules just for the purpose of advancing its financial hub policy will be limited. In the meantime, the government will work to enhance transparency in our regulatory environment and find innovative ways to improve competitiveness of our financial industry.* Please refer to the attached PDF for details.
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Jul 16, 2020
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Jul 16, 2020
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Jul 15, 2020
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Jul 15, 2020
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Jul 14, 2020
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Jul 14, 2020
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Jul 13, 2020
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Jul 09, 2020
- FSC Chairman Speaks about Promoting Artificial Intelligence in Financial Industry
- FSC Chairman Eun Sung-soo visited the Korea Insurance Development Institute’s automobile technology research center in Icheon-si, Gyeonggi-do on July 9 to see the application of artificial intelligence in auto insurance, and held talks on the topic of the insurance industry in the 4th industrial revolution and post-pandemic era.The following is a summary of Chairman Eun’s remarks.With the 4th industrial revolution, technological innovation is rapidly taking place throughout the world. The financial industry is also experiencing changes in its structure and terrain. In a post-pandemic era, this changing trend, such as digitalization of the economy and development of untact services, is expected to accelerate even further.The insurance industry has diverse channels through which it provides services to consumers, and is closely connected to different industries, which is why it has a high potential for convergence with innovative technologies. In this regard, the AI-based auto damage appraisal service is an excellent example of technological convergence in the insurance industry.The FSC will set up a working group to draw up plans to promote AI in the financial sectors, which will focus on improving regulations, building infrastructure and ensuring consumer protection.In order to ensure a continuous growth of the insurance industry, different attempts and tryouts for innovation and adapting to changes should be highly encouraged.The FSC will strongly support the insurance industry’s efforts at innovation through its regulatory sandbox program and continuous efforts to improve regulations.* Please refer to the attached PDF for details.
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Jul 09, 2020
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Jul 07, 2020
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Jul 07, 2020
- FSC Chairman Underscores Balance between Financial Innovation and Data Security
- FSC Chairman Eun Sung-soo attended a seminar held by the Financial Security Institute commemorating the day of information protection on July 7 and delivered a keynote address underscoring the importance of maintaining a balance between financial innovation and data security.The following is a summary of Chairman Eun’s remarks.(DIGITAL FINANCE) The COVID-19 pandemic has accelerated the trend for contact-less financial services and digital transformation amid the 4th industrial revolution. Consumer preference for online transactions, such as mobile-based simple money transfer or payment methods, has increased as well as the frequency of telecommuting and teleconferencing by financial institutions. The government has been actively pursuing policies to promote innovation in the financial sectors. As a result, a total of 106 ‘innovative financial services’ have been designated through the regulatory sandbox program. As open banking became fully operational in December last year, more than seven of ten economically active individuals now use open banking, and the number of account views and transfers reached more than a billion. Moreover, the revisions to the three major data-related laws including the Credit Information Act will go into effect on August 5.(NEW CHALLENGES) Innovation in digital finance poses new challenges. Unlawful activities, such as identity theft or vishing, can lead to financial crimes. With a growing number of big techs and other nonfinancial institutions playing bigger roles in the provision of financial services, the third party risk originating from nonfinancial sectors has increased. The scope of cyber threats has also become wider with the application of newly available digital technologies. In this regard, without a guarantee for the safe protection of personal wealth and identity, innovation in digital finance is nothing more than a house of cards.(BALANCE BETWEEN INNOVATION SECURITY) In order to maintain an appropriate balance between
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Jul 06, 2020
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Jul 06, 2020
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Jul 02, 2020
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Jul 02, 2020
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Jul 02, 2020