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SEOUL, March 25 (Yonhap) -- South Korea's financial regulator said Monday that it will push for an overhaul in local banking firms' governance structure, focusing on reducing excessive power wielded by their chief executives.
The Financial Services Commission (FSC) plans to draw up measures that will prevent heads of Korea's major banking holding companies from abusing their power, according to officials.
Chiefs of bank holding firms have been under fire for intervening in personnel appointments at their affiliates and giving tasks only verbally without paper evidence, making it difficult to figure out who is responsible when something goes wrong, the FSC said.
"We wouldn't say no to taking very harsh steps (for the overhaul) if that's what it takes to show the government's willingness," said an FSC official.
The regulator's move comes as Shin Je-yoon, the new FSC chief, vowed to overhaul the governance structure of the country's major financial holding companies, as part of an effort to stem the firms from becoming too political.
The heads of Korea's four major banking groups, including state-run Woori Finance Holdings Co., were known to be close aides to former President Lee Myung-bak.
Shin stressed that he seeks to establish an independent management structure between the holding firms and its affiliates.
The FSC will stipulate in detail the scope of a banking chief's authorities and responsibilities. It will also make sure that from now on banking companies document every instruction given from its chief.
The head of a banking firm must listen to the opinions of its affiliates before making any decision and will be barred from unfairly intervening in affiliates' management affairs, the FSC added.
The regulator's move is expected to spur a big shake-up of the chief executives, leading to their resignations amid heightening pressure for them to step down.
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