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Lee criticizes financial institutions as 'bloodless and 'tearless,' calls for broader public service

Published: 19 Dec. 2025, 20:35 Updated: 21 Dec. 2025, 17:34

President Lee Jae Myung listens during a policy briefing from the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) held at the government complex in Seoul on Dec. 19. [JOINT PRESS CORPS]

President Lee Jae Myung sharply criticized Korea’s financial institutions on Friday, saying that they are focusing too heavily on household lending, such as mortgages, while neglecting their broader public role.

Speaking at a policy briefing by the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS), Lee said the financial sector had become overly cautious and detached from social responsibility. He described finance as “the cutting edge of liberal capitalism — bloodless and tearless,” and said that approach was undesirable from a policy standpoint.

Lee also accused the sector of entrenched corruption. He said the government had received numerous tipoffs alleging that a small group of people was rotating positions and profits within the industry.

“It seems financial companies are mostly just playing it safe, using real estate as collateral and collecting interest,” said Lee, referring to current lending practices. “These institutions operate with the backing of state-issued currency and enjoy privileged positions, so they should bear commensurate responsibilities. But I question whether they have a strong sense of public duty.”

In response, the FSC unveiled a plan to improve access to formal financial services for marginalized and excluded groups. The measures aim to expand midrange interest loans and help borrowers in delinquency or those driven to illegal private lenders return to institutional finance.

The plan includes emergency microloans to prevent borrowers from turning to unlicensed lenders. Borrowers who repay responsibly will gain access to more favorable policy finance products and eventually become eligible for bank loans — forming a so-called “credit buildup” path.

Financial Services Commission (FSC) Chairman Lee Eog-weon speakds during a policy briefing from the FSC and the Financial Supervisory Service (FSS) held at the government complex in Seoul on Dec. 19. [JOINT PRESS CORPS]

One example is a loan product that provides up to 1 million won ($676), currently offered at an annual interest rate of 15.9 percent, to prevent reliance on illegal lenders. Borrowers who repay in full will be refunded 50 percent of the interest paid, effectively bringing the rate down to 6.3 percent. A preferential rate of 5 percent will apply to socially disadvantaged groups.

Afterward, borrowers can access policy finance loans of up to 5 million won at 4.5 percent. Continued on-time repayment will make them eligible for unsecured bank loans through a program called “Stepping Stone Loan.”

The government will also launch a 4.5 percent loan product for high school graduates and job seekers to cover vocational training and startup expenses. With a limit of 5 million won and a five-year term, the government will invest a total of 150 billion won over five years.

Lee Seung-woo, deputy vice governor of the Financial Supervisory Service and head of the joint task force against stock manipulation, speaks during a press briefing at the Korea Exchange in Yeongdeungpo District, western Seoul on Sept. 23. [YONHAP]

This initiative addresses criticism that current policy finance products mainly benefit university students or those already employed. Similarly, basic livelihood security recipients and low-income earners will be eligible for living expense loans of up to 5 million won at the same 4.5 percent rate.

“Lower interest rates benefit those with more capital, collateral and credit, which only widens the wealth gap,” Lee said. “The only way to correct this kind of structural inequality is through government policy.”

Lee also reiterated his stance on rooting out stock price manipulation.

“It’s absurd that listed Korean companies are only valued at 60 percent of what they’re worth,” Lee said. “That’s because of a lack of trust in market transparency. We must demonstrate that price manipulation and illicit trading in Korea will utterly ruin the perpetrators.”

Financial Supervisory Service (FSS) Governor Lee Chan-jin speaks during a policy briefing from the Financial Services Commission (FSC) and the FSS held at the government complex in Seoul on Dec. 19. [JOINT PRESS CORPS]

The president suggested expanding the current joint task force between the FSC, FSS and Korea Exchange, saying, “We need to create additional teams, make them compete, and shake things up so thoroughly that nobody even dares to dream of stock manipulation.”

Lee also took aim at corporate governance in financial holding groups. While reviewing the FSS’s task force on governance reform, he remarked, “There are a lot of whistle-blower reports coming in about the selection process for financial company leaders,” asking presidential chief of staff Kang Hoon-sik and presidential director of national policy Kim Yong-beom if they had received any as well.

“This is not just slander between rivals — there seems to be considerable validity,” said Lee. “It’s the same group forming a corrupt inner circle and taking turns profiting.”

FSS Gov. Lee Chan-jin concurred, calling financial holding firms a particular problem, citing board structures that center around people tied to the chairman.

President Lee Jae Myung speaks during a policy briefing from the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) held at the government complex in Seoul on Dec. 19. [PRESIDENTIAL OFFICE]

“We’re preparing inspections of individual financial institutions under the holding companies in question,” the FSS Governor said.

Meanwhile, the FSC announced the first investment destinations for the National Growth Fund, which totals 150 trillion won. Seven large-scale projects were selected for their anticipated economic ripple effects across industry and regions, particularly in AI, semiconductors and secondary batteries.

The short list includes the “K-Nvidia” development program, a national AI computing center, an offshore wind power project in South Jeolla, a solid-state battery material plant in Ulsan, a power semiconductor plant in North Chungcheong, a foundry in Pyeongtaek and an energy infrastructure project at the semiconductor cluster in Yongin.

“We will also launch a citizen participation fund so the financial and industrial sectors can work together to achieve another Korean success story and share the fruits of growth,” said FSC Chairman Lee Eog-weon.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM SEON-MI [[email protected]]

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Lee criticizes financial institutions as 'bloodless and 'tearless,' calls for broader public service

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