The head of Korea’s top financial 3)watchdog criticized the current oligopolistic system dominated by five major commercial 4)lenders, which hinders them from sharpening their global competitiveness. “If (Korean banks) stay the way they are now, they will likely have a hard time gaining an 5)edge in the global market,” Financial Supervisory Service Chief Lee Bok-hyun said during a meeting with foreign investors in Seoul on Wednesday. This meeting was organized by the FSS to provide information to foreign investors about the Korean financial watchdog’s supervision directions and also to boost their interest in Korean financial firms. Attendees included leading 6)asset management firms like JP Morgan.

 

 Lee added that the banks' competitiveness in the overseas market is vital, as the domestic market is 7)saturated. The FSS is currently reviewing ways to break the oligopolistic structure. Lee also 8)condemned the banks enjoying 9)hefty bonuses in 2022, which amounted to a combined 1.38 10)trillion won ($1.08 billion). “They have been 11)complacent about the oligopolistic structure, reaping more than 80 percent of their earnings from interest income, and enjoyed the benefit 12)by themselves. I think it is a great cause for concern as it may weaken the growth potential of the 13)sector,” Lee said.

 

 The five major commercial banks -- Shinhan, KB Kookmin, Hana, Woori and NH NongHyup — 14)account for 60 to 70 percent of the domestic deposit and loan market in Korea. Lee also talked about excessive government involvement, which is considered one of the factors that has made the Korean market less appealing to foreign investors. He promised that the financial watchdog will mostly respect local banks’ decisions on their 15)shareholder return policies as long as they have sufficient capital reserves.

 

 The FSS head also noted that he is well aware of the potential risks that can arise from real estate project financing and promised that the financial watchdog will monitor individual businesses more closely. "We are also encouraging financial firms to secure enough capital against possible losses in order to minimize any shocks from stressful situations on the financial system," he added. Toward the end of the meeting, he touched on the financial authorities' reform plan announced earlier this year that aims to attract more foreign investors.

 

 The plan includes extending the operating hours of the foreign exchange market and 16)repealing the registration requirement for foreign investors. After the changes take place, foreign investors can also be informed of 17)dividend information before they make investment decisions. “We also intend to gradually 18)mandate 19)disclosure filings in English for listed companies,” he added. These revisions are a part of the country's efforts to get its stock market included in the top grade of global market 20)indices. The government has been seeking to get the Korean 21)equity market upgraded to “developed” status from the current “emerging” status by New York-based index provider Morgan Stanley Capital International. 

 

Published: 2023-02-22

Source: The Korea Herald

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<Word Expression>

1) oligopoly : 소수 독점
2) FSS (Financial Supervisory Service) : 금융감독원
3) watchdog : 감시인
4) lender : 대출기관
5) edge : 경쟁력, 우위
6) asset management firm : 자산관리 회사
7) be saturated : 포화상태
8) condemn : 비난하다
9) hefty : 많은, 꽤 큰
10) trillion : 1조
11) complacent : 자기만족적인
11) by themselves : 그들 혼자서
13) sector : 분야, 영역
14) account for : --을 차지하다
15) shareholder return : 주주회복
16) repeal : 철회하다
17) dividend : 배당금
18) mandate : 요구하다
19) disclosure filings : 투자자의 결정에 영향을 줄 수 있는 회사의 모든 정보를 발표하는 것.
20) indices (index의 복수형) : 지표
21) equity market : 증권시장