News that reported the suspicion of Woori Bank’s poor sales of Lime Fund. KBS News9 screen capture
The Financial Supervisory Service has notified the banking company’s chief executives of severe disciplinary action in advance by taking responsibility for the’lime fund crisis’. Woori Finance Chairman Son Tae-seung was notified of a’consideration of job suspension’, and Shinhan Finance Chairman Cho Yong-byeong and Shinhan Bank President Jin Ok-dong were notified of a’cautionary warning’ and a’consultant warning’, respectively. The above is a severe disciplinary action that restricts the appointment of executives at financial companies for 3 to 5 years. The financial authorities have held the top managers of the securities industry at the end of last year, and this time also held the top managers of the banks seriously. The Lime Fund crisis is a large-scale financial accident that caused massive loss of investors and chaos in the financial market due to the suspension of redemption of a whopping 1.7 trillion won. It is deserving that top executives who have not properly controlled internally are subject to severe discipline. The final level of sanctions against them will be finalized through the Sanctions Deliberation Committee and the Financial Services Commission at the end of this month. In the case of Woori Bank, the Financial Supervisory Service is said to have made a problem with the situation in which funds continued to sell even after identifying signs of insolvency. Woori Finance denies this, saying, “We preemptively stopped selling for risk management.” If you sold it even if you knew it was insolvent, it would be a serious matter. This is a different problem from incomplete sales, where product risks are not properly communicated. In the future, the seriousness of the specific truth and responsibility should be carefully screened through sanctions. Following securities firms, banks protest that the FSS’s discipline is excessive. It is said that even the chief executive of a financial company is being punished by force in order to overthrow the responsibility of poor supervision. It’s okay. It goes without saying that the financial authorities’ poor regulation and supervisory responsibility for private equity funds has been largely responsible for the Lime crisis. However, this does not relieve financial companies from being liable for poor sales. The priority is to make a thorny reflection on the huge investment loss and to make special efforts to prevent recurrence. If the disciplinary action is unfair, you can argue in the follow-up procedure. The recent high-intensity sanctions on private equity, such as Lime, Optimus, and Discovery, are worth evaluating as a positive change in that they showed a willingness to set the principle of consumer protection right away from the practice that has been properly handled as a disciplinary punishment for working-level employees. . However, financial authorities should humbly reflect on the premature deregulation of private equity funds and the’original sin’ of poor supervision. It is difficult to say that they only hit financial companies after fixing a few systems.