FSS to lower bar­ri­ers for for­eign firms

Gov­er­nor Yoon vows to fos­ter Korea as fi­nan­cial hub

The Korea Times - - FRONT PAGE - By Kim Bo-eun [email protected]­re­atimes.co.kr

The chief of the Fi­nan­cial Su­per­vi­sory Ser­vice (FSS) pledged Mon­day to cre­ate a more fa­vor­able en­vi­ron­ment for for­eign fi­nan­cial firms do­ing busi­ness here.

FSS Gov­er­nor Yoon Suk-heun made the re­mark dur­ing a meet­ing with the CEOs of 18 for­eign banks, bro­ker­ages, as­set man­age­ment firms and in­sur­ers based in Seoul.

“We will im­prove Korea’s short­com­ings in co­op­er­a­tion with re­lated min­istries and lo­cal gov­ern­ments to fos­ter Korea as a fi­nan­cial hub,” Yoon said in the meet­ing held at the Con­rad Ho­tel on Yeouido.

“The num­ber of for­eign fi­nan­cial firms in Korea has re­mained stag­nant for the past five years. About 10 years have passed since Korea es­tab­lished laws and poli­cies to fos­ter a fi­nan­cial cen­ter, but we have not seen any sat­is­fac­tory re­sults.”

The num­ber of for­eign fi­nan­cial firms stood at 164 in 2014, grew to 168 in 2016 but fell to 163 last year. Cur­rently, there are 165 firms op­er­at­ing here.

“Korea has high reg­u­la­tory bar­ri­ers and there is little in­cen­tive to en­ter the mar­ket in terms of the tax system, not to men­tion the lan­guage bar­rier and liv­ing en­vi­ron­ment.”

Many for­eign en­ti­ties have left in re­cent years, due to what was seen as a com­bi­na­tion of these fac­tors. Gold­man Sachs As­set Man­age­ment, the Royal Bank of Scot­land, Bar­clays, JP Mor­gan As­set Man­age­ment and Mac­quarie Bank have all closed their op­er­a­tions here.

Yet Yoon stressed Korea’s mer­its as a fi­nan­cial cen­ter.

“We have a siz­able de­mand for fi­nan­cial as­sets, and a dy­namic fi­nan­cial mar­ket and IT in­fra­struc­ture,” he said.

“Re­cently, the govern­ment has also been boost­ing sup­port to fos­ter the fin­tech in­dus­try through a sand­box for fi­nan­cial reg­u­la­tions.”

Among at­ten­dees at the event were the chiefs of lo­cal op­er­a­tions of the Bank of New York Mel­lon, Su­mit­omo Mit­sui Bank­ing Cor­po­ra­tion, Mizuho Bank, State Street Cor­po­ra­tion, ING Bank, China Con­struc­tion Bank Cor­po­ra­tion, the In­dus­trial & Com­mer­cial Bank of China, Hong Kong & Shang­hai Bank­ing Group and BNP Paribas.

Lo­cal heads of as­set man­age­ment firms DWS, Mac­quarie, Bar­ings and East­spring were also present, along with the head of No­mura Se­cu­ri­ties.

As for chiefs of in­sur­ers, Tongyang and ABL Life In­surance, AIG and ACE at­tended.

Yoon heard their views on fos­ter­ing Korea as a fi­nan­cial hub.

They also spoke about the eas­ing of “Chi­nese Wall” reg­u­la­tions, which re­fer to in­for­mal in­ter­nal bar­ri­ers in an or­ga­ni­za­tion set up to pre­vent ex­changes that could lead to con­flicts of in­ter­est. The fi­nan­cial au­thor­i­ties eased re­lated reg­u­la­tions in May. Other top­ics in­cluded al­low­ing the use of over­seas-based cloud com­put­ing sys­tems.

In ad­di­tion, Yoon em­pha­sized con­sumer pro­tec­tion, in the wake of the “DLF fi­asco,” in which in­vestors in cer­tain fi­nan­cial de­riv­a­tives op­tions saw ma­jor losses in re­cent months.

“As was seen in the DLF case, fi­nan­cial firms’ sales prac­tices seek­ing short-term profit weak­ens con­sumer pro­tec­tion and dam­ages in­vestors’ trust, harm­ing the longterm growth of fi­nan­cial firms,” Yoon said.

“Poor con­sumer pro­tec­tion and in­ter­nal con­trol sys­tems wreak havoc on both in­vestors and fi­nan­cial firms.”

Cour­tesy of FSS

Fi­nan­cial Su­per­vi­sory Ser­vice (FSS) Gov­er­nor Yoon Suk-heun speaks dur­ing a meet­ing with the heads of for­eign fi­nan­cial firms here at the Con­rad Ho­tel on Yeouido, Seoul, Mon­day.

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