The head of Woori Bank on Monday urged employees to do their best to compensate clients who faced losses from derivative options based on their recommendation, in an apparent move to heed the financial watchdog’s reccomendation.
“I ask that you actively listen to what customers have to say and draw up additional measures that could minimize their damages,” Woori Financial Group Chairman and Woori Bank CEO Sohn Tae-seung told his employees in a meeting. The meeting was attended by director-level employees across the nation, including 25 new officials.
The Financial Supervisory Service recently advised Woori and KEB Hana Bank to provide compensation of up to 80 percent of their customers’ losses for misselling derivative-linked funds and securities. The products, designed to track the performance of constant maturity swap rates of the US dollar and UK pound or German bond yield put investors at risk of losing almost a combined 350 billion won ($301 million).
Woori Bank CEO Sohn Tae-seung (Yonhap)
Sohn added that he is reviewing a proposal from his employees, which calls for the establishment of a consumer protection fund. The fund is proposed to be launched with portions of the bank’s ranking officials’ salaries, which Sohn vowed to legally review.
His remarks come amid the financial authorities’ efforts to bolster the monitoring system of such “reckless” selling of high-risk financial products by commercial lenders and brokerages here.
“We believe that the number of cases where consumers incur losses from the derivative products sold by banks is projected to increase,” FSS Gov. Yoon Suk-heun told the press on Monday.
‘The FSS is planning an organizational reshuffle that could boost its monitoring ability by dividing it into different categories, which has been discussed since the launch of the agency in 1999,” he added.
On Woori’s proposal to establish a compensation fund based on their employees‘ salaries, another FSS official told reporters on condition of anonymity that it seems to be “unrealistic.”
By Jung Min-kyung (firstname.lastname@example.org