Capital Market Opinion (Ceased)
Direction for Improving Korea’s Financial Consumer Protection Regulations
April 22, 2014
- Despite numerous efforts to combat it, disputes in the area of financial consumers continue to unabated. The recent and highly publicized cases of financial accidents, with disproportionate losses by vulnerable segments such as the elderly, have brought to debate the need to reform regulations surrounding Korea’s financial consumer protection. The intrinsic features of financial transactions, information asymmetry and uncertainty, coupled with the slowdown in economic growth and population aging that Korea faces will make the likelihood of financial disputes an increasing problem going into the future. However, discussion of financial consumer protection reform needs to be mindful to take a balanced view. Care needs to be given not to excessively hamper financial market development or to limit the choice of investors. And from a longer-term perspective, financial consumer protection needs to move in the direction of principles-based regulation, but that will require a much higher standard of ethics and active participation of the financial industry than its current level.