The nation’s top two supervisory officials are rolling up their sleeves to closely review the hurdles the foreign financial sector may have faced while doing business in Korea after watching a growing number of overseas-based financial firms scale back their operations here.
The two main regulators tasked with preventing a further exodus are Financial Services Commission chairman Shin Je-yoon and Financial Supervisory Service governor Choi Soo-hyun.
Though the nation has eliminated a variety of barriers and sought to create a level playing field over the past few decades, some foreign players are still reportedly struggling with regulatory hurdles.
Among the obstacles are strict preliminary screening and a longer-than-expected wait period when applying for new business approval.
FSC chairman Shin recently ordered the senior regulatory staff to look into whether the recent withdrawal of foreign firms in the local market was caused by problems created by the nation’s financial authorities.
|HSBC Holdings Plc. signage is displayed atop the HSBC Building in Seoul. (Bloomberg)|
While Shin said he shared the view that some players’ business retrenchment or withdrawal from Korea was basically due to their headquarters’ global management policies, it is not desirable for the authorities to take a position of an observer.
“Financial regulators have been taking an excessively conservative position,” he told the staff. “Rather than drawing a long-term vision on business activities here, the regulators’ approach is staying at the level of only supervision.”
Shin reproached the staff for allegedly taking a lukewarm or skeptical attitude toward foreign firms’ inquiries over the introduction of new financial products or opening new branches or liaison offices.
“When the FSC drags on the approval procedures, our competitiveness in the financial industry continues to deteriorate,” he told the staff.
Shin, as a remedy, instructed the staff to notify “all” ongoing consultations between foreign firms and the authorities of himself. In particular, the staff was ordered to classify the details in their coming reports to the chief regulatory official by the firms’ nationality.
FSS governor Choi Soo-hyun also earlier pledged to reduce inconveniences experienced by foreign financial firms.
“We plan to simplify business licensing procedures, which would shorten the period between foreign firms’ application for opening branches and regulators’ endorsement,” Choi has said.
He also reiterated that Seoul would ease the burden of uncertainty over the following sanctions “by streamlining the procedures from probes to final actions” involving disciplinary measures.
It sometimes used to take more than half a year to finalize the sanction level after inspectors completed their investigation.
For enhanced communication, Choi said he would hold meetings with foreign CEOs twice a year, up from the previous once a year.
U.S.-based Goldman Sachs Asset Management has announced its plan to pull out their position from Korea and U.K.-based HSBC Korea said last month that it would close down 10 branches for retail financing.
Netherlands-based ING Group has handed over its asset management unit to an investor and is considering selling ING Life Korea.
More and more market insiders say that the so-called “Bye Korea” trend in the financial field may undermine the nation’s image on the global stage.
By Kim Yon-se (email@example.com