Voters line up to cast their ballots at a polling station in Mangwon-dong, Seoul, on Wednesday. (Chung Hee-cho/The Korea Herald)

Regulators rush to get lawmakers to work on crucial bills on consumers, savings banks, capital market


Following the surprising general election, eyes are now trained on long-delayed financial bills that could have a huge impact on South Korea’s financial sector.

Three finance-related bills, among others, attract particularly keen attention: the Financial Consumer Protection Act, the Capital Market Act and the Depositor Protection Act.

The bills, if passed, are expected to reshape the country’s financial industry, and businesses in the related sectors are tracking their progress closely.

The April 11 general election chose lawmakers for the 19th National Assembly, but financial regulators are poised to accelerate steps to get key legislation to pass in the current 18th term.

An official at the Financial Services Commission told the press that the FSC was trying to persuade lawmakers to pass the three bills during the extraordinary session of the 18th National Assembly, slated for early next month.

If the bills do not pass in the current Assembly term, the legislation process will have to go through a series of time-consuming debates and negotiations during the new term of the Parliament, a scenario that the FSC wants to avoid as much as possible.

Now that the ruling Saenuri Party has won the majority and is likely to take the lead in political debates, there is a better chance for the bills to be processed before the current National Assembly runs its course.

But some lawmakers might balk at giving the bills the green light partly because the broader political scene is set to confront more uncertainties with new figures from both ruling and opposition parties likely to voice their own opinions on the crucial legislation.

The FSC, however, finds itself racing against time as far as the three key legislative revisions are concerned. For a start, the Financial Consumer Protection Act looks unlikely to pass.

The bill mainly aims to help protect consumers in the financial sector by setting up a new agency. The local financial sector has witnessed a series of challenges such as debt-laden savings banks in the past couple of years, and experts have long pointed out the lack of legal protection for financial consumers exposed to various risks.

But lawmakers haven’t started deliberating over the bill. Barring a dramatic bipartisan breakthrough, the bill is now expected to be handled in the next term.

The FSC’s focus is placed on the proposal to revise the Capital Market Act. This crucial bill is designed to kick-start investment banks in Korea and introduce other comprehensive financial reforms. The regulator, led by its chief Kim Seok-dong, submitted the bill to the National Assembly last year but in the following months lawmakers have failed to scrutinize the legislation in detail.

The FSC also insisted that lawmakers work on the Depositor Protection Act as quickly as possible as additional restructuring is scheduled for savings banks. The act includes a clause about extra support for troubled savings banks, including a fresh batch of much-needed bailout funds.

By Yang Sung-jin (insight@heraldcorp.com)