South Korean President Yoon Suk-yeol has called on the private sector to help curb soaring costs for the country’s most vulnerable people, with a focus on banks and communication services.
Yoon presided over a meeting of the country’s economy ministers on Wednesday to discuss how to tackle cost-of-living pressures.
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“I think private sector players need to voluntarily join efforts to share the pain by helping keep prices stable,” Yoon said at the meeting, highlighting the role banks and communications services could play.
Yoon’s office said the president ordered measures to boost competition in the banking and communication services sectors during the closed-door part of the meeting.
At the same time, the government said it would launch a task force this month to study ways to improve business practices at banks amid concerns raised in the media about their big profits and generous retirement payouts.
The government said in a statement the task force would draw up measures by the end of June to boost competition, improve compensation schemes, strengthen the loss-absorbing capability and reduce reliance on interest income in the banking sector.
Comprising financial regulators, banks, scholars, legal experts and consumer groups, the task force will also aim to come up with ways to expand fixed-rate lending and increase banks’ contribution to society, it added.
South Korea has 20 locally incorporated banks and 35 branches of foreign banks, but business has been dominated by a handful. Banks have frequently been criticised by local media for making unfairly large profits by hiking interest rates.
In recent weeks, local media also reported that some banks had paid hundreds of millions of won per head as compensation for early retirement.
The government’s statement contained no new plan to introduce more competition among mobile phone services, a sector also dominated by a handful of providers.