President Lee Jae-myung on Monday sharply criticized the financial industry, saying its "public role is far too weak."
Speaking at a Cabinet meeting and emergency economic review session held at the presidential office, Lee said, "Aren't they running monopolistic businesses by restricting the creation of other financial institutions?" He added, "Policy Chief Kim Yong-beom made a very apt point when he said that financial institutions are quasi-public entities."
"Private companies make money by developing technology, pioneering markets, working hard, and exporting. But financial institutions earn profits by receiving funding support from the Bank of Korea through state authority and collecting interest on the loans they extend," Lee said. "More than half of what they do is a public role."
He continued, "All current financial institutions were once special-purpose banks," adding, "The very idea that financial institutions think 'making money is everything — that is the purpose of a financial institution's existence' is itself a problem. Aren't they also part of the national order required to maintain financial order?"
Lee criticized the industry's lending practices, saying, "If they only extend loans to first-grade or top-tier borrowers and refuse to even consider others, those people are pushed to rely on secondary financial institutions, loan companies, and private lenders. That should not happen." He added, "Isn't finance fundamentally about setting interest rates by averaging across people with very high and very low repayment capacity?"
"That is the principle of finance," he said. "Some of them will fail to repay, and that is naturally built into the cost, into the interest. Financial institutions cannot just cherry-pick the most favorable segments for their business and leave the rest neglected."
Lee emphasized, "So that ordinary people are not excluded from financial services, we need to keep instilling the idea that so-called inclusive finance is one of the obligations of financial institutions."
