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The third sanction review committee (sanction review) for Woori Bank will be held on the 8th over the Lime Asset Management Fund crisis, which caused a large-scale redemption suspension. It is noteworthy how the bank’s efforts to relieve damage will affect the actual sanctions level reduction.
According to the financial sector on the 7th, the Financial Supervisory Service notified the schedule of the third sanctions hearing individually on the afternoon of the 8th. The sanctions review is expected to focus on Woori Bank. In the meantime, the FSS has completed the deliberation process when several financial companies are referred to sanctions trials and decided on the level of sanctions at once. However, this time, it is known that there is a high possibility to conclude by discussing Woori Bank first, taking into account the pace of discussions by financial companies.
The fact that the Dispute Mediation Committee (Minjo Committee) for the Lime CI Trade Finance Fund sold by Shinhan Bank was announced on the 19th is also interpreted as having an influence on the proceeding of such sanctions. Shinhan Bank and Shinhan Financial Group are expected to open additional sanctions after the sub-committee to conclude.
The question is whether financial firms’ consumer bailout efforts can reduce the final sanctions level. According to the current regulations on inspection and sanctions by financial institutions, it is stipulated that when sanctions by executives and employees, the reduction or exemption can be decided by taking into account the extent of the accident amount and whether or not to correct or compensate for the loss. In February of last year, a rule was added to consult with the head of the Ministry of Financial Consumer Protection in case of sanctions by financial companies.
On the basis of these regulations, financial companies are expressing enough efforts to take action after the incident and recover damage to consumers. In fact, Woori Bank paid indemnity to the two customers according to the results of the sub-group in February. The process of self-regulation for the rest of the customers is also in progress.
Earlier, the Financial Supervisory Service informed Woori Finance Chairman Son Tae-seung (then Woori Bank President) of a significant job suspension, a censure warning to Shinhan Bank President Jin Ok-dong, and a cautious warning to Shinhan Finance Chairman Cho Yong-byung. The level of sanctions on financial company executives is divided into five stages: recommendation of dismissal, suspension of work, censure warning, cautionary warning, and caution. Among them, censure warnings and above are classified as severe disciplinary action restricting employment in financial companies for 3 to 5 years.
/ Reporter Ji-young Kim [email protected]
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