Financial authorities increase pressure on banks

• Published date: 01 March 2023
• Publication title: The Korea Times

The Financial Supervisory Service (FSS) will be conducting a regulator inspection into Shinhan Financial Group and Shinhan Bank later this month, the watchdog agency said Wednesday. It will be the first of its kind conducted on Shinhan in four years.

The FSS' regular inspection takes place every two to five years, during which the financial watchdog thoroughly examines a financial company's overall management, ranging from corporate governance, executive appointments, internal control systems, banks' loan-to-deposit interest ratios and salary increases.

As it will be the first large-scale regular inspection of a major financial group since President Yoon Suk Yeol criticized bank executives' excessive profit-taking and bonus parties last month, market attention is now on how the inspections will be rolled out. Besides Shinhan, the FSS plans to conduct regular inspections on several other banks throughout this year.

"In its on-the-spot inspection, the FSS is likely to be focusing on some of the issues, such as bonus payments among other things, which have particularly raised issues lately," an official from the FSS said.

Following President Yoon's policy direction to promote further competition in the banking industry in order to reduce harm caused by the existing oligopoly in the banking sector, the financial authorities ? the Financial Services Commission (FSC) and the FSS ? have launched a task force last Wednesday to work on the matter. The first working-level meeting of the task force is slated to be held on Thursday morning, while the...