Research Report
Ⅰ. Background and Purpose
□ The effect of recent international financial crisis, which rose up to the surface with 2007 sub-prime mortgage bond insolvency and hit its max in 2008, still remains in our society.
○ Many countries including U.S., are putting a lot of effort to overcome financial dangers which has never occurred in the history, and is especially focusing on reconstructing financial policies.
□ Establishment of Financial Consumer Protection Organization is the main issue that is being considered by the authorities.
Ⅱ. Main Summary
□ Overlook on reformed legislation of financial crisis
○ There has been expansion of alleviation in policies and open market
- Walls between businesses have been abolished and open in financial market made the appearance of huge financial corporations, but big financial corporations also relies on producing profits
- On the other hand, it is easier for government to enforce small bank to follow the policies, and even if small bank are put into threat, expansion of these threats into the whole market is easier to resist
□ Financial Consumer Protection Organization
○ The concept of 'financial consumer' was commonly used in reality, but it was not easy to connote its concept in legal terms.
○ Financial consumer can also be included in the concept of 'consumer' as it has the status of consumer at final transaction in derivative markets,
- The fact that financial consumer, like ordinary consumers, lack in information, difficult to transfer the dangers, and lacks capacity to negotiate should be considered
- Institute or organization to protect financial consumer should be independent, and if financial authority is in charge of consumer protection, the purport of this system may be diminished due to its characteristics
Ⅲ. Expected Outcomes
□ In order to develop financial industry, we need to learn lessons from countries which were exposed to recent financial crisis, and there is necessity to control the effect of external shock due to traits of small open economic system
○ We need to overlook on establishing independent financial consumer protection organization, separate from ordinary financial organizations in order to protect normal consumers which differentiates with professional investors.