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The Bank of Korea should be given rights to supervise financial institutions independent of other financial authorities, BOK Governor Kim Choong-soo said Friday.
Speaking after the monthly rate review meeting, Kim said that the central bank should be able to conduct independent supervision under “special circumstances.”
“(The BOK) means to conduct (independent investigations) when a particular financial company or a bank is considered to be in need of liquidity or when collaborative investigations can’t be conducted despite a need for such action,” Kim said.
Kim said that while the BOK is not seeking to conduct independent supervision all the time, nor to the right to monitor institutions on minor matters, independent auditing powers would aid the central bank in fulfilling its role.
Currently, the Financial Supervisory Service monitors all financial companies including banks, securities firms and insurance companies. But calls from the administration and the National Assembly to reform the FSS’ power are mounting after some of its former and incumbent staff were implicated in corruption scandals.
“The central bank is the ultimate lender, and in no country does the central bank address a situation based on information provided by others. Supervisory authority and a central bank that fit the global trend are needed.”
A revised version of the Bank of Korea Act that would grant the central bank investigative powers has been awaiting the National Assembly’s Legislation and Judiciary Committee’s approval since December 2009.
While Kim said that revisions would be beneficial, he indicated that more changes may be needed.
“As the revisions were drawn up over a long period, it would be inappropriate to discuss its content,” Kim said.
“But, that does not mean that (I) consider it to be sufficient. It is judged to be at least helpful towards fulfilling new roles of the central bank, and its duties regarding the national economy.”
By Choi He-suk (cheesuk@heraldcorp.com)
Speaking after the monthly rate review meeting, Kim said that the central bank should be able to conduct independent supervision under “special circumstances.”
“(The BOK) means to conduct (independent investigations) when a particular financial company or a bank is considered to be in need of liquidity or when collaborative investigations can’t be conducted despite a need for such action,” Kim said.
Kim said that while the BOK is not seeking to conduct independent supervision all the time, nor to the right to monitor institutions on minor matters, independent auditing powers would aid the central bank in fulfilling its role.
Currently, the Financial Supervisory Service monitors all financial companies including banks, securities firms and insurance companies. But calls from the administration and the National Assembly to reform the FSS’ power are mounting after some of its former and incumbent staff were implicated in corruption scandals.
“The central bank is the ultimate lender, and in no country does the central bank address a situation based on information provided by others. Supervisory authority and a central bank that fit the global trend are needed.”
A revised version of the Bank of Korea Act that would grant the central bank investigative powers has been awaiting the National Assembly’s Legislation and Judiciary Committee’s approval since December 2009.
While Kim said that revisions would be beneficial, he indicated that more changes may be needed.
“As the revisions were drawn up over a long period, it would be inappropriate to discuss its content,” Kim said.
“But, that does not mean that (I) consider it to be sufficient. It is judged to be at least helpful towards fulfilling new roles of the central bank, and its duties regarding the national economy.”
By Choi He-suk (cheesuk@heraldcorp.com)
