The Necessary Change in the Future of Financial Regulation
By Consumers Union on Wednesday, July 17th, 2013
By guest blogger Tara Thwin-Paljor
The government of South Korea made an announcement last week about plans to split their financial regulatory body. This is a move that may have deep global implications for the future of financial regulation. In reorganizing the two bodies, the government is attempting to focus on more consumer protections and protecting the financially-troubled.
In South Korea, there are currently two financial bodies already in place, the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS). However, the government has taken more notice recently of the overlap between the two agencies, and is now making plans for reorganization and separating the two.
South Korea is not alone, but other countries like the United Kingdom that have made similar changes to their financial regulatory bodies. The UK’s Financial Services Authority (FSA) creates a new regulatory focus on consumer protections. What we may be witnessing right now are countries slowly changing financial regulation in response to financial crises. By focusing more on consumer protections and reorganizing regulatory bodies, consumers may get more power in the global market.
With more and more governments recognizing the need to focus on consumer protections for financial products, the US has taken upon similar priorities. The CFPB was created, and then needed to be strengthened to help our slowly recovering economy. We have this now, with Richard Cordray’s official confirmation by the Senate (in a 66-34 vote) as the director of the CFPB.