Kim Byung-hwan "Political Circles Should Be Cautious About Intervening in Additional Interest Rates... Accelerating Virtual Asset Institutionalization"

Kim Byung-hwan, the chairman of the Financial Services Commission, stated on the 22nd that the government and political circles should be cautious about intervening in the additional interest rates of banks. This remark was made with Lee Jae-myung, the leader of the Democratic Party of Korea, summoning major commercial bank heads in mind.

Furthermore, Chairman Kim emphasized that, referencing the trends following the inauguration of the second Trump administration in the U.S., South Korea should also accelerate the institutionalization of virtual assets.

At a press conference held at the Seoul Government Complex, Chairman Kim responded to a question about whether Lee Jae-myung's recent summoning of bank heads was an attempt to pressure them to lower additional interest rates. He said, "It seems that the meeting was more about listening to opinions than the concerns initially feared," and added, "I believe the government or political circles should be cautious about strongly intervening in the additional interest rate matters."

Previously, on the 20th, Lee Jae-myung held a 'Banking Sector On-site Meeting' at the Bank Hall in Myeong-dong, Seoul, attended by heads of six major banks, including KB, Shinhan, Hana, Woori, NongHyup, and IBK. He urged, "In difficult times, support from financial institutions is crucial," and asked them to "play a role in becoming a hope for the common people." Initially, Lee's side had communicated to the Korea Federation of Banks that lowering additional interest rates was a key agenda for the meeting, but due to the controversy over 'political interest rates,' they took a step back during the actual event.

Chairman Kim explained, "Even though the base interest rate was lowered twice last year, the speed or extent of the reduction in additional interest rates (which banks add to the base rate) has not been sufficiently reflected. I think it's time for banks to reflect the drop in the base interest rate for the new year," and added, "As banks are actually lowering additional interest rates and reviewing them, we will monitor and check."

He also announced an active response to virtual assets. Chairman Kim stated, "The U.S. is likely to take an active stance on virtual assets," and "We are preparing to move a little faster in institutionalizing them by referencing international trends." This was in response to a question about whether there could be a change in the stance of South Korea's financial authorities, given the apparent change in the U.S. stance on virtual assets with the inauguration of the Trump administration.

Regarding the allowance of corporate virtual asset accounts, he said, "Although the corporate account allowance part was omitted from last week's Virtual Asset Committee content, it is not that we are not doing it," and added, "We will try to finalize our stance and inform you as soon as possible."

A question was also raised about the level of sanctions against Upbit, which the Financial Intelligence Unit is reviewing for non-compliance with anti-money laundering obligations. Chairman Kim responded, "The level of sanctions is not something to mention," but added, "Since there are parts that investors may be affected or anxious about, I think it is necessary to reach a conclusion as soon as possible."

The issue of Woori Financial Group's acquisition of insurance companies was also mentioned. Previously, Woori Financial Group submitted an application to incorporate ABL Life Insurance and Tongyang Life Insurance as subsidiaries. According to regulations, results must be notified within 60 days, but considering various variables, when asked if the period is variable, Chairman Kim said, "We plan to review according to procedures." He added, "There are still results from the Financial Supervisory Service's inspection and management status evaluation," and "We do not predict deadlines and review as it can vary depending on various situations."

Shin Min-kyung, Hankyung.com reporter radio@hankyung.com