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SEOUL (Reuters) -South Korea’s financial watchdog on Monday announced a crackdown on careless risk management by financial firms.
Practices that could come under scrutiny included investing in real estate projects without proper risk assessment or making excessive earnings through incomplete sales of equity-linked securities, said the governor of the Financial Supervisory Service, Lee Bok-hyun.
“Authorities will not tolerate practices of passing on risks to consumers and society by privatising short-term profits without thorough risk management,” Lee said at a media conference on the agency’s policy agenda for this year.
Lee said financial firms that avoid making proper provisions for losses could even be kicked out of the market and financial crimes would face “highest-level” punishments.
The regulatory agency’s policy priorities include household debt management, supervision over short sales of stocks and virtual assets, Lee said.
(Reporting by Jihoon Lee; Editing by Sonali Paul)
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