South Korea task force to study problems in country’s banks

SEOUL, South Korea: After President Yoon Suk-yeol called on banks to help curb the cost-of-living crisis affecting vulnerable people this week, South Korea launched a task force to help improve business practices and salaries at banks.

In a statement, the country’s top regulator, the Financial Services Commission, said the panel will be headed by Kim So-young, vice chairman of the Commission, and will comprise regulators, scholars, researchers and officials from financial industry associations.

During the panel’s opening meeting, Kim So-young said that it will study ways of increasing competition between existing banks and facilitating market entry for niche service providers.

The panel will also look at ways of helping banks diversify their business practices, which are currently heavily dependent on interest rate margins, and improve their pay structure, he added.

In a separate meeting with foreign investors, Financial Supervisory Service Governor Lee Bok-hyun said, "By doing so, we believe that Korea’s banking industry will be able to become more competitive and efficient, which will make the Korean financial markets more attractive to investors," as reported by Reuters.

The authorities will respect financial firms’ decisions on shareholder returns, such as dividends, he added.

There is growing public discontent over reports of big performance-sharing and early-retirement bonus payments by banks, President Yoon Suk-yeol and other government officials have stressed.

Also this week, South Korea’s Yonhap news agency reported that major Korean banks have been lowering lending rates after Yoon’s comments.