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| Financial Supervisory Service (FSS) Governor Lee Bok-hyun speaks during an audit session held at the National Assembly in Seoul, Tuesday. Yonhap |
By Anna J. Park
The Financial Supervisory Service (FSS) plans to wrap up its months-long investigations over local banks and securities firms' abnormal overseas remittance transactions that amounted to nearly 10 trillion won ($7 billion) in 2021.
According to an FSS briefing at an annual audit session held at the National Assembly on Tuesday, a total of 82 local business entities were investigated for involvement in suspicious overseas remittance transactions at dozens of local banks totaling $7.22 billion over the past 12 to 18 months. As the transactions seemed suspicious in terms of both remittance size and local entities' business activities, the FSS has been looking into the cases with the cooperation of the banks since June this year.
As the total amount of suspicious transfers snowballed during the course of the financial watchdog's investigation over the past months, the investigation has far exceeded its originally planned duration. If the investigation is wrapped up by the end of the month, as per the FSS' expectation, the financial authority plans to take stern measures against related parties according to local regulations and laws. The FSS also plans to come up with revisions for foreign exchange-related laws and measures to prevent further incidents.
The financial watchdog also plans to strengthen its monitoring and detecting system for illegal practices of short-selling. It aims to proactively deploy a fast-track approach, when necessary, to speed up investigations on illegal short-selling. It will deal more sternly with attempts to manipulate stock markets, including illegal internal trading and unfair acts of trading.
FSS Governor Lee Bok-hyun also expressed regret over lawmakers' criticisms that the financial authority failed to take prompt action against soaring household debt.
"I share the understanding that the FSS should have managed household debt with more thorough preparation against the globally tightening monetary policies," Lee said, expressing his regret that the financial watchdog agency hadn't focused more on household debt reduction and the composition of the debts to respond to the rapidly soaring interest rates.
Lee went on to say that the agency plans to guard the country's financial systems by proactively responding to complex global challenges facing the domestic economy.
"The FSS will do its best to protect the financial system's stability by closely monitoring uncertainties in the economic and financial markets to discover risk factors at the earliest possible time," Lee stressed. "In particular, the FSS will make sure risk factors from real estate project financing and overseas alternative investments will not transfer to systemic risks to the country's financial stability."
He added that the FSS will inspect each financial company's capital soundness.
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