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Newsletter | May 2014, Issue 2 |
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BANKING |
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3-Year Plan for Economic Innovation & Plan for Implementing Finance Policy Matters |
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On March 13, 2014, the Financial Services Commission (“FSC”) held a meeting for members of the financial services industry to discuss the government’s 3-Year Plan for Economic Innovation (“3-Year Plan”) and Plan for Implementing Finance Policy Matters (“Implementation Plan”). The FSC said it planned to work together with the industry in implementing the financial services section of 3-Year Plan. The key provisions are as follows. |
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Economy Supported by Strong Infrastructure |
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Public sector reform
- ‒ Require disclosure of all information other than confidential business information and have public institutions voluntarily formulate plans for stabilization.
- ‒ Decrease debt ratio of public institutions to 200% or less and implement system for managing total number of bonds issued.
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Protect consumer rights and interests
- ‒ Establish Financial Services Consumer Protection Board that is separate from the financial prudence monitoring body.
- ‒ Enact Financial Services Consumer Protection Law, which will be the framework statute for protecting consumers of financial services.
- ‒ Research and analyze consumer complaints to reform unreasonable practices.
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Strengthen protections for personal information
- ‒ Investigate actual industry practices regarding personal information protection and devise strategy to fundamentally prevent recurrence of widespread leakage of personal information.
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Dynamic and Innovative Economy |
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Create business environment in which start-ups and second chances are valued
- ‒ Gradually eliminate application of joint guarantee requirement to founders of start-ups who meet certain qualifications, beginning with policy finance.
- ‒ Develop technology evaluation system to encourage financial assistance.
- ‒ Encourage switch from collateral and guarantee-driven services to mortgage and investment based services.
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Implement system for virtuous cycle of capital circulation
- ‒ Utilize policy finance, such as growth ladder funds, to expand infusion of private venture capital.
- ‒ Adopt crowd funding and other innovative funding mechanisms (implement security measures such as cap on investment amount).
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Revitalize the M&A market
- ‒ Deregulate PEFs and expand scale of acquisition finance vehicles, such as growth ladder funds.
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Balancing Domestic Consumption and Exports |
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Reform structure of household debt
- ‒ Set management index for household income to debt ratio and appropriately manage increase rate of household debt.
- ‒ Improve loan structure through soundness management, provision of asset-backed securities, tax incentives, etc.
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Foster financial services
- ‒ Reform regulations on financial service sites and implement technology evaluation system (enhance financial support system for promising enterprises in the service industry).
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Encourage hiring of female and young labor.
- ‒ Systemically reform employment practices targeting young people (discourage overreliance on past experience in hiring).
- ‒ Encourage “returnship” programs (for female workers) and part-time employment.
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Next Steps |
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Set up technical evaluation database within this year to encourage utilization of technical assessment data in financial services industry. |
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Overall, manage the implementation system through economy ministers’ meeting. |
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Establish taskforce at FSC for development of financial services sector (taskforce to be jointly led by Vice-Chairman of FSC and Chairman of Financial Development Assessment Commission). |
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