On May 15, the FSS held a plenary meeting of the 2026 Financial Supervisory Advisory Committee at the Bank Hall in Seoul, where they discussed the direction of financial supervision.
In his opening remarks, Lee Chan-jin, the head of the FSS, noted, "The uncertainty in the global economy continues due to the impact of the situation in the Middle East that began in February. If high exchange rates and inflation persist, corporate activities may contract, and the difficulties faced by ordinary citizens and vulnerable groups could worsen."
Lee emphasized the need for a shift in the direction of funding from the financial sector. He stated, "Financial institutions should not be fixated on easy interest income but should support productive sectors to foster economic growth."
To achieve this, the FSS plans to manage risks related to household debt and real estate PF by implementing loan inspections and introducing limits on PF lending. The goal is to mitigate excessive capital flow into real estate and create conditions for funds to be supplied to productive sectors such as businesses.
The FSS will also work on regulatory reforms to enhance the investment capacity of financial institutions. This includes rationalizing loss recognition for market risks in the banking sector and revising the calculation system for the insurance sector's solvency ratio (K-ICS) to broaden the foundation for investments in productive areas.
Protecting ordinary citizens and vulnerable groups was also highlighted as a key supervisory task. The FSS aims to promote a culture of inclusive finance within the banking sector and support savings banks and mutual finance institutions in fulfilling their roles as community financial entities. Additionally, measures to combat financial crimes, including comprehensive strategies to eradicate voice phishing and one-stop support services for illegal lending, will be strengthened.
This year, the Financial Supervisory Advisory Committee consists of 92 members, with the number of consumer-related representatives increased to 25 to align with academia, research institutions, and the financial sector. This change aims to more broadly reflect consumer opinions in the direction of supervision.
* This article has been translated by AI.
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