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Overview

The Financial Supervisory Service examines financial institutions pursuant to authority conferred by article 37 of the Act on the Establishment, etc. of Financial Services Commission (the “Establishment Act”)ㅡ formerly the Act on the Establishment, etc. of Financial Supervisory Organizationsㅡand other financial statutes.

FSS examiners perform full-scope and targeted examinations of financial institutions to help ensure their safety and soundness and compliance with laws and regulations. FSS examiners conduct full-scope examination to evaluate financial institutions’ overall financial, management, operational, and compliance performance. The selection of financial institutions that are to undergo a full-scope examination is made in advance during the annual examination planning. The determination of the timing and duration of a full-scope examination and the number of examiners to be assigned is normally made with due consideration given to the size, the complexity, and the risk profiles of the subject institution, findings from the previous examination, and issues of supervisory concerns that have been raised from off-site monitoring.

A targeted examination is limited in scope and is intended to address a narrow range of supervision matters and concerns such as incidents of irregularity and unsound business activity.

Off-site monitoring also constitutes an important component of financial institution examination that complements on-site examination. For normal off-site monitoring, FSS examiners analyze financial and operational reporting from financial institutions, evaluates quantitative safety and soundness measures, and work to identify areas of weaknesses and risks in need of supervision action. If necessary, FSS examiners conduct an on-site inspection and meet with the subject institution’s senior executives to address issues of supervisory concern.