|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. / Courtesy of FSS|
By Kim Bo-eun
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's 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. 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 long-term growth of financial firms," Yoon said.
"Poor consumer protection and internal control systems wreak havoc on both investors and financial firms."