Global Biz

S. Korea's central bank to be allowed greater authority

(Xinhua)
Updated: 2009-12-07 17:44

SEOUL: South Korea's parliamentary committee on Monday approved a bill to expand the Bank of Korea (BOK)'s role in coping with financial instability and investigating local financial firms.

The bill, revised by the Strategy and Finance Committee of the National Assembly, calls for a wider role of the BOK, whose authority is mainly focused on keeping price stability under the current law.

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The authority to supervise local banks was transferred to the Financial Supervisory Service (FSS), the financial watchdog, in the wake of the Asian Financial Crisis in 1998.

If enacted, the bill will allow the central bank to conduct an investigation into local banks on its own when the FSS refuses to jointly work with the BOK without proper reasons.

The government and the financial watchdog, meanwhile, opposed the revision, saying the current supervisory system is not seriously flawed in countering financial turmoil.

"The results that came out run counter to the global trend in discussion over supervisory rights," Chin Dong-soo, chairman of the Financial Services Commission, said in a statement, expressing regrets.