FSC Plans to Accelerate Structural Reforms in Finance to Facilitate National Goal of Making Korea Irreplaceable

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FSC Plans to Accelerate Structural Reforms in Finance to Facilitate National Goal of Making Korea Irreplaceable Jul 15, 2026

The Financial Services Commission presented its work progress and policy agendas going forward on July 15 in a government work report session jointly held with the Ministry of Finance and Economy, the Ministry of Data and Statistics, and the Ministry of Planning and Budget under the theme of “a great economic takeoff to usher in an irreplaceable Republic of Korea.”

At the work report session, Chairman Lee Eog-weon of the Financial Services Commission presented key policy progress and achievements in the first half of 2026 and outlined plans and tasks going forward. With the pursuit of a sweeping overhaul in the financial industry and the acceleration of structural reforms, Chairman Lee pledged to facilitate the national goal of making the Republic of Korea irreplaceable.

Achievements in H1 2026

In the first half of 2026, the FSC has worked to produce tangible outcomes in our efforts to push for productive finance and transform the financial industry to make it more inclusive and compassionate.

In the capital markets, the FSC established foundations to make a transition toward a “Korea premium.” Based on the four major principles of trust, shareholder value, innovation, and market access, the FSC has constantly worked to upgrade and seek improvements in our capital markets. As a result, the Korean stock markets have been able to escape from the chronic trap of boxed-in movements and start to gain momentum for growth. In this regard, corporate practices have also been showing signs of improvements, placing a higher priority on shareholder value, as more companies are making moves to increase cash dividends and expand the cancellation of treasury shares.

The flow of funds in the financial sector has also begun to shift toward more productive sectors and away from the real estate market. After six months of launching the National Growth Fund (NGF), there are already 21 investment projects approved under the program for a value of about KRW14.6 trillion to help strengthen the competitiveness of domestic high-tech companies and their ecosystems. The public investment portion of the NGF (KRW600 billion) introduced in May this year was sold out in just five business days. Along this line, financial companies have also actively provided financial support for productive sectors (about KRW150 trillion as of May 2026) and have been making organizational changes and other internal efforts to bolster their own productive finance capacity.

The FSC has also strived to seek a transition to make financial services more inclusive and more compassionate. In this regard, about KRW10.4 trillion worth of long-term delinquent debts were purchased for quick write-offs under the New Leap Fund program, which helped to immediately put a stop on debt collection attempts for some 885,000 individuals. With the introduction of measures intended to bring about changes in how financial companies manage delinquent debts and the measures to require debt collection agencies to obtain an authorization for their business operation, the FSC is continuing to seek fundamental changes and progress in debt collection practices. Additionally, the FSC was able to boost financial access for lower-income individuals and vulnerable groups through the provision of lower interest rates and expanded supply of policy-based microloan opportunities. In March this year, the FSC launched the one-stop assistance program to support the victims of illegal private lending activities, and it has helped to make available more effective remedial measures for those who have fallen prey to the crimes that infringe upon people’s livelihoods.

Going forward, the FSC will build upon the changes that have been made so far and speed up the implementation of structural reforms across the financial industry to facilitate the national goal of ushering in an irreplaceable Republic of Korea.

Key Policy Agendas

I. Make Financial Services More Productive

The FSC will continue to push for productive finance to create more opportunities for Korea to advance into a global super-gap industrial powerhouse.

a) Financing to secure competitive edge in high-tech industries

The overall size of the National Growth Fund (NGF) will be expanded to KRW200 trillion from the previously planned level of KRW150 trillion to be able to more effectively respond to the deepening global competition over technologies and rising investment demand for high-tech sectors. The scope of industry areas eligible for funding support from the NGF will also be expanded to include future strategic industries, such as aerospace. The portion of direct equity investments from the NGF will also be increased to KRW5 trillion a year from KRW3 trillion a year previously. In the meantime, a new technology-focused asset management company (tentatively named “Korea Strategic Technology Partners (KSTP)”) will be established to more strategically invest in future core technologies with a supply of up to KRW10 trillion in ultra-long-term investment funds from the NGF.

b) Prioritizing regional finance to promote well-balanced growth

Policy financial institutions and private financial companies will continue to work together to boost the supply of regional finance to promote a well-balanced growth across all regions. Policy financial institutions will expand the supply of regional finance to KRW164 trillion by 2028 from the level of KRW100 trillion in 2025. There will be efforts to introduce new regional finance programs intended to prioritize support for the development of regional enterprises. As part of this effort, the Korea Credit Guarantee Fund (KODIT) will offer KRW1 trillion worth of special credit guarantees for regional enterprises in strategic industries. To encourage private financial companies to boost their supply of regional finance, the method for evaluating financial companies’ performance on community reinvestment will be improved. Along the same line, a safe harbor will be introduced to grant financial companies exemptions from sanctions or penalties when providing financial support for high-tech startups. Additionally, a factbook of productive finance (which will include performance on the supply of regional finance) will be published. The regional community-oriented co-prosperity and growth projects jointly pursued by policy financial institutions, large companies, and financial companies will be operated on an expanded basis to promote the growth of small- and medium-sized suppliers and enterprises in regional economies.

c) Creating conditions to make Korean capital markets the global best

To promote a balanced growth in the Korean stock markets, there will be three major structural reform programs implemented on the KOSDAQ market. Additionally, illegal online activities of influencing market movements by finfluencers will be strictly dealt with. There will also be measures to bring about improvements in and across the trading process. The securities settlement period will be shortened to T+1, and there will be improvements sought for the unreasonable practice of paying out interest on IPO subscription deposits. To spread the culture of shareholder value-centered corporate practices and create conditions for long-term investing practices, various measures will be introduced, such as prohibiting split listing (duplicate listing) of parent-subsidiary companies, publicly revealing companies with low price-to-book ratio (PBR), and encouraging listed companies to boost dividend payouts.

II. Make Financial Services More Inclusive

The FSC will seek to reform the entire financial system to make inclusive finance a more lasting and permanent goal in the financial industry and work to protect debtors and prevent crimes.

a) Pursuing structural reform to make inclusive finance a more permanent feature

The taskforce on inclusive finance will seek to fundamentally redesign the financial system in the private sector. To make sure that inclusive finance does not fade out as a one-off handout of benefits, the taskforce will seek to introduce a comprehensive evaluation framework on inclusive finance and require the appointment of a chief inclusive finance officer (CIFO) at financial companies. In addition, by establishing a microfinance stabilization fund, the foundation for providing benefits in interest rates for policy-based microloans will be strengthened. Moreover, a new low-interest rate (4.5%) and long-term (10 years) microloan program (KRW1 million) will be introduced in connection with welfare assistance, which will help to open up opportunities for access to mainstream finance.

b) Building advanced debtor protection and crime prevention systems

To close loopholes in the overall debtor protection system, there will be continuous efforts to make sure that the measures to improve financial companies’ delinquent debt management practices are being adopted and implemented seamlessly. Public financial institutions will lead the way in strengthening debtor protection through blanket write-offs of long-term delinquent debts (over 20 years). Additionally, there will be steps taken to examine the non-performing loan (NPL) market to prepare measures to strengthen related regulations. To more effectively stamp out illegal private lending activities and voice phishing scams, there will be measures to strengthen response mechanisms and enhance remedial measures to ensure the provision of prompt assistance for victims.

c) Boosting support for young adults and small businesses

The provision of financial support programs made available for young adults and small businesses will be expanded. The youth future savings program will help young adults with the accumulation of assets, while the provision of various financial education and consulting programs will help them better equipped with asset management capabilities. Additionally, there will be a new policy finance program introduced for young startup entrepreneurs with special benefits for interest rates and guarantee fees. A new credit card issuing system taking advantage of alternative credit scoring models will also be introduced in support for young adults and foreign residents. For small business owners, a pilot launch of small business credit bureau (SCB) for bank loans (for about KRW2 trillion) is scheduled to take place in August this year. Moreover, the supply of special funding support package tailored for small businesses will be expanded to KRW12 trillion from KRW10.5 trillion previously. The current cap on prepaid electronic payment instruments for foreigners will be raised to boost convenience for tourists and facilitate their use at small shops and stores.

III. Make Financial Services More Trustworthy

The FSC will work to ensure stability in financial markets and push for innovative ways to make financial services more trustworthy for the public.

a) Ensuring stability and order in financial markets

There will be continuous policy efforts to stably manage the size of household debt and strengthen capital regulations for financial companies with regard to their handling of mortgage loans to continue to push for a decoupling of finance from the real estate market. There will be adequate provision of financial support in response to challenges and difficulties in the real economy amid high oil prices, high consumer prices, and high interest rates. To ensure proactive management of potential failure and insolvency of financial companies, the financial stabilization framework will be revamped through the introduction of a “financial stability account” and a “quick resolution process.” In the meantime, there will be measures to stamp out market-disturbing activities by establishing an AI-based insurance fraud prevention infrastructure and strengthening the anti-money laundering (AML) capacity.

b) Upgrading old practices and seeking innovation via digital and AI transformation

The corporate governance structure of financial companies will be upgraded to boost fairness and transparency in the CEO selection and reappointment process. The overall administrative and supervisory mechanisms for financial companies, including inspection, sanction, and licensing, will be revamped. At the same time, a complete lifting of the network separation rule will be sought to remove hurdles and promote digital and AI transformation in the financial industry. In addition, there will be improvements brought to the personal credit information consent system to facilitate the offering of financial services that are more inclusive and tailored to the needs of individual customers using AI and big data analytics.

The FSC will make sure to continue to closely engage with the public and listen to their needs and work to bring about prompt and tangible outcomes to make the financial industry better serve the needs of the public.

Please refer to the attached PDF for details.

Household Loans, June 2026

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