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[2018-1 Global CEO Lecture] “Work on Your Problem Solving Skills”…Choi JongKu, Chairman of the Finan
2018.04.20 Views 2253 경영대학
[2018-1 Global CEO Lecture]
Choi JongKu, Chairman of the Financial Services Commissions … “Work on Your Problem Solving Skills”
Choi JongKu, Chairman of the Financial Services Commissions … “Work on Your Problem Solving Skills”
On April 19, the Business School invited Mr. Choi JongKu, Chairman of the Financial Services Commission for the Global CEO lecture series at Supex Hall, LG-POSCO Building. The lecture was mainly on ‘Finance in South Korea – Productive, Inclusive and Trusted Finance’.
The Financial Services Commission (FSC) was established in 2008. It is a top decision-making organization responsible for domestic financial policies, aiming to advance the financial sectors and stabilize the financial market. Chairman Choi JongKu, one of our proud alumni (Business ‘76), passed the Civil Service Examination in 1981. After his appointment as Deputy Minister for International Affairs at the Ministry of Strategy and Finance, he served as President & CEO of the Seoul Guarantee Insurance (SGI). Prior to his appointment as the FSC Chairman, he was Chairman & President of the Export-Import Bank of Korea. The lecture was mainly on △current issues on the economy △productive finance △ inclusive finance △ trusted finance △conclusion.
10 years since the 2008 Global Financial Crisis, the global financial market has entered into a stable phase again. As a result of increased volume of global trade in 2017, the global growth rate has grown to 3.7 percent. Mr. Choi added, “Financial market reflects real economy. As a consequence of the increase of consumption in advanced economies and the expansion of exports in developing countries, the financial market has stabilized.” It is obvious in the domestic market as well; the expected rate of economic growth is 3.0%. The key for a stable economy in South Korea is the ability to handle the external crisis.
Moreover, Mr. JongKu Choi pointed out 2 issues in the domestic economy. The first is the deterioration of growth engine. That is, in 2015 the technological gap between South Korea and China has significantly reduced, compared to that of 2011. In addition, Mr. Choi pointed out population growth. In 2016 the fertility rate dropped to 1.17, which is considerably lower than the average OECD fertility rate of 1.7. He added, “the weakening of production capacity is inevitable, as a result of the reduction of working age population. That is why the identifying source of production is crucial.” The second issue he raised was the economic distribution with regard to economic equilibrium. Over 60% of domestic sales come from the large conglomerate, and yet the large proportion of employees up to 85% work for small-sized business. Mr. Choi commented, “the economy’s distribution to the household has decreased, whereas the importance of conglomerate continues increasing. It results in unemployment issues with an increased household burden on the cost of living.”
Moreover, Mr. JongKu Choi pointed out 2 issues in the domestic economy. The first is the deterioration of growth engine. That is, in 2015 the technological gap between South Korea and China has significantly reduced, compared to that of 2011. In addition, Mr. Choi pointed out population growth. In 2016 the fertility rate dropped to 1.17, which is considerably lower than the average OECD fertility rate of 1.7. He added, “the weakening of production capacity is inevitable, as a result of the reduction of working age population. That is why the identifying source of production is crucial.” The second issue he raised was the economic distribution with regard to economic equilibrium. Over 60% of domestic sales come from the large conglomerate, and yet the large proportion of employees up to 85% work for small-sized business. Mr. Choi commented, “the economy’s distribution to the household has decreased, whereas the importance of conglomerate continues increasing. It results in unemployment issues with an increased household burden on the cost of living.”
As a resolution for the issues raised above, Mr. Choi put emphasis on productive, inclusive and trusted finance. Above all, productive finance refers to financial sector focusing on its fundamental functions including financial intermediation, property management, risk management and payment settlement function. He added, “the nature of finance is to enable efficient capital flow. The FSC, therefore, is planning to apply a reasonable method of regulation to make it possible to achieve ‘productive finance’. He suggested an example that firms now go through an audit process by auditing firms assigned by the FSC, whereas earlier firms were allowed to select the auditing firms themselves.
The concerns on inclusive finance have been raised from the social responsibility and policy onfinancial sector. Chairman JongKu Choi said “An incredibly large proportion of disadvantaged in the world does not have an access to insurance, credit transactions or even saving up for themselves. The government will work on the support system to realize social values.” One of the possible government support is the implementation of a loan with a moderate interest rate. This moderate interest rate loan is allowed for people with low levels of credit rating, between 4 to 7 stage ratings.
The concerns on inclusive finance have been raised from the social responsibility and policy onfinancial sector. Chairman JongKu Choi said “An incredibly large proportion of disadvantaged in the world does not have an access to insurance, credit transactions or even saving up for themselves. The government will work on the support system to realize social values.” One of the possible government support is the implementation of a loan with a moderate interest rate. This moderate interest rate loan is allowed for people with low levels of credit rating, between 4 to 7 stage ratings.
In addition, Chairman JongKu Choi also stressed that “credibility is the key to the operation of a financial market. Any transactions of deposit or investment are made under the assumption that they get back to you, 100% of the time. Instability of financial sector is highly critical to financial sectors because they will lose their credibility. The worst case scenario, it may result in failure of returning the deposit to its owner. Mr. Choi continued, “and most of the times the factor causing financial instability is household debt. The ratio of household debt in Korea expands in a fast rate. Nevertheless, the large proportion of household has quite high level of credibility because of the mortgage loan.” The problem is that it seems stable on the outside. However, that does not necessarily mean we have a stable financial market. After all, we need to work on lowering the rate of household debt. He suggested few strategies including an increase of quality efficiency of the structure, mortgage repayments, implementation of consumer protection strategies.
In conclusion, Mr. JongKu Choi stressed ‘YouthQuake’. ‘YouthQuake’ is the word of the year 2017 by Oxford Dictionary, which is defined as ‘a significant cultural, political, or social change arising from the actions or influence of young people’ (Oxford Dictionary). “Above all other aspects, what employers are looking for is an employee who is full of brilliant ideas, with excellentproblem solving skills” he concluded, “I strongly hope you make a significant change in South Korea”.
The Business School’s coming up ‘Global CEO Special Lectures’ will invite △ Sang-ho Yoo, President of Korea Investment & Securities Co., Ltd. (4/26) △Ki-seok Park, CEO of SIGONG tech (5/3) △ Younghoon Park, Executive Director of GS SHOP (home shopping) (5/10) △ Young Yul Seo, Chairman of PT.Pratama Abadi Industri (5/17) △ Kyung-Soo Park, CEO of PSK (5/24) △ Young-Sik Kim, President of PwC Korea (5/31).
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2018.04.19