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FSS seeks tie-ups with G20 nations in 2012

Korea’s financial regulator plans to bolster collaboration with international organizations to develop advanced supervision skills and help Korean financial firms to actively tap overseas markets.

On Sunday, the Financial Supervisory Service unveiled its 2012 policy directions, which include enhancing cooperation with overseas supervisors and hosting planned gatherings.

Its global policy features pushing for signing memoranda of understanding with several members of the Group of 20.

“We will seek MOUs with counterparts from the G20 countries and convene several supervisory meetings as the chair,” the FSS said in statement.

In April, a plenary meeting of the International Forum of Independent Audit Regulators is scheduled to be held in Busan.

The IFIAR, composed of 38 members such as the U.S., Germany and Japan is an organization for global coordination in the accounting regulatory sector.

The FSS is also aiming to host the so-called “supervisory college,” a gathering of international regulatory officials for joint research activities.

It is also targeting higher position at the International Organization of Securities Commissions, an entity for global regulations on the brokerage sector.

“We have set the goal of becoming a committee member in the IOSCO during the coming meeting in May,” the FSS said.

In addition, the Korean regulator will participate in joint forums, composed of the world’s three major supervisory entities ― the IOSCO, the Basel Committee on Banking Supervision, and the International Association of Insurance Supervisors.

In an effort to procure human resources for global finance and attract many overseas investors, the FSS will hold investor relations sessions in foreign countries and job fairs at home and abroad.

It issued the necessity of fostering professionals, well acquainted with new regulations under the coming implementation of the Korea-U.S. Free Trade Agreement.

To effectively cope with financial woes such as the eurozone debt crisis, the FSS plans to establish year-round discussion channels with Chinese and Japanese regulators.

A senior-level supervisory meeting between Korea China and Japan is planned for the second quarter on Jeju Island.

For the 2012 supervision polices at home, the FSS said it would enhance supervision of risk management among financial service companies, citing possibly unfavorable external factors.

“The world’s economy is projected to face a slowdown in growth and high volatility in 2012. Further, Korea is expected to face growing geopolitical risks,” it stressed.

In a bid to prevent local financial companies from being undermined by external factors, the regulatory body said it would instruct them to secure sufficient foreign currency liquidity.

“A variety of preemptive measures against possible woes will also be taken in the market,” it said.

Financial firms, including commercial banks, will be ordered to accumulate more loan loss provisions and to refrain from providing major shareholders with excessive dividends.

The FSS, which regards snowballing household debts as a big threat to soundness of financial companies, is set to induce a “soft landing” in financial companies’ management of loans to the household sector.

In the brokerage sector, the supervisor will set up detailed legal grounds for measures against unfair stock traders including manipulators.

“We will be entitled to access suspects’ financial transaction records, phone call records and IP addresses,” the FSS said in a statement.

The regulator is also moving to take tougher sanctions against accounting firms engaged in lax auditing on corporate clients.

In the secondary banking sector, automated teller machines for customers of savings banks will likely be set up this year, according to the regulator.

To strengthen the right of financial consumers, the FSS will finalize its project to launch an independent consumer protection center by spinning off the current regulatory department.

By Kim Yon-se (kys@heraldcorp.com)
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