Financial Supervisory Service Governor Choi Soo-hyun said Wednesday that Korea will meet global standards in regulating domestic and foreign financial firms’ local operations.

He delivered the pledge at a luncheon meeting with members of the American Chamber of Commerce in Korea in downtown Seoul to mark the 60th anniversary of the institution’s establishment.

While Choi reiterated that the authorities would foster a level playing field between domestic and foreign capital on the basis of global standards, he vowed to take stern punitive actions against rule-violators.

Under the initiative of the chief regulator, the FSS has also introduced the “prior consultation” system in an attempt to sufficiently reflect their viewpoint when the authorities push forward new legislation or a revision of the rules.

Prior notification on revised laws was formerly insufficient. Choi has continued to say that FSS staffers will also be instructed to be more active in communicating with non-Korean industries.

Choi, however, refused to alleviate regulations on the loan-to-value ratio assessment system, which was proposed by AMCHAM Korea.

“They asked me about the relieving (raising) of the LTV ratio, and I said no,” said the regulator chief, as he made his way out of the AMCHAM General Membership Meeting attended by about 80 executives of foreign companies.

The LTV ratio reflects the risk to a lender in issuing a mortgage. A higher LTV ratio means that the banks can give larger loans for the same mortgage.

Raising the LTV ratio could help invigorate the financial market, but could increase the household debt by allowing larger loans. Choi emphasized during his speech that “prevention is better than a cure.”

The proposal was again raised in the question-and-answer session at the end of the meeting by AMCHAM chairman Pat Gaines, who asked for Choi’s perspective on how to speed up Korea’s regulatory policies to match the global standards, such as for bank loans.

In response, the FSS governor requested that Gaines later submit specific cases and explanations in writing.

“I will sure do that,” Gaines told The Korea Herald after the meeting. But he did not expect the final response this year, as a deregulation proposal involves approval from the FSS, financial decision maker Financial Services Commission and the National Assembly.

About other proposals raised by the foreign executives, the governor said that he gave “answers based on the principles.”

Choi said the FSS would host the next annual FSS SPEAKS forum in March for more direct communication with foreign companies operating in Korea.

By Chung Joo-won (joowonc@heraldcorp.com)