Yoon orders measures against banks’ “money party”

Feb 14, 2023, 09:24 am

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President Yoon Suk-yeol speaks during a ceremony at a shipyard of Hyundai Heavy Industries Co. in Gunsan on Feb. 10, 2023, to mark the shipment of the first block produced since the shipyard resumed operations last October./ Source: Yonhap

AsiaToday reporter Lee Wook-jae

President Yoon Suk-yeol on Monday urged banks to use profits to relieve hardships of public, saying, “Banks have the nature of a public good, so it is appropriate for them to use their profits to help struggling people, the self-employed and small business owners through so-called win-win financial benefits, and to build a solid reserve in case of future instability in financial markets.”

“People are suffering greatly due to banks’ high interest rates” Yoon was quoted as saying by senior secretary for press affairs Kim Eun-hye. The president also ordered the Financial Services Commission (FSC) to “devise response measures so that banks’ so-called ‘money party’ does not cause sense of incongruity among the people, Kim added. Yoon made the remarks during a weekly meeting with his senior secretaries.

“Banks are financial companies, but they are called (financial) institutes. They need to play a sufficient social role because they are approved by the state and maintained as oligopolists,” an official from the presidential office said.

The president’s order come amid public outrage over reports that banks are having a “money party.” In fact, it has been reported that some 2,200 people who retired from five major commercial banks, including KB Koomin Bank and Shinhan Bank, were given at least 600 million to 700 million won per person in voluntary retirement benefits, and that 200 to 300 percent of bonus were given to employees last year.

It is seen as a measure that expresses Yoon’s critical view that banks, which achieved all-time results by expanding the loan-to-deposit margin following the base rate hike, are focusing on taking care of their employees’ allowances, ignoring the their role as “public goods” to reduce the burden on customers.

The government has yet to come up with specific measures, however it is expected that measures will be taken in a different way from the tax pursued by the main opposition Democratic Party, which has been calling to collect more taxes from refining companies and banks that enjoyed hefty profits due to higher oil prices.

#Yoon Suk-yeol #banks #FSC