Characteristics of British financial legislation and implications of changes in financial supervision method in Korea

Abstract

Financial regulation and financial policy are actively discussed not only just in Korea but also all over the world. In the United Kingdom, known as a traditional financial powerhouse, combines the financial and the IT sector by applying its own dual supervisory system without using an integrated financial supervisory model commonly referred to as international standards. In addition, the UK emphasizes future-oriented principles through reflection and evaluation of financial supervision. For example, implements incubator and accelerator development policies to support financial tech companies, and unregulated space policies to produce innovative new financial products in the market. As a result, it has grown into a center of fintech startups, and in 2013, the growth rate of financial technology investment in the UK and Ireland exceeded 600%, showing a steep rise. Various policies based on the UK's dualized supervisory system as above have many implications for Korean finance. First, the UK's central bank-centered soundness regulation system can be a solution to secure the independence of current Korean regulatory agencies. Second, if work is divided between soundness regulators and corporate behavior regulators, the part of policy responsibility can be improved. Third, unregulated space can be a solution for growth and financial stability in the Korean fintech sector. Finally, innovative financial reforms led by the government can help Korea's rapid and effective financial stability. Unlike the UK, Korea implements an integrated supervisory system, but by analyzing the above UK cases, it is likely to be an alternative to solve the problems of financial regulations in Korea's current situation.