Seoul: The head of the financial watchdog warned Tuesday his agency plans to conduct on-site inspections of brokerages that have been sluggish in settling bad project finance (PF) loans tied to shaky construction projects. Lee Chan-jin, the governor of the Financial Supervisory Service (FSS), made such remarks in a meeting with the heads of local brokerages in western Seoul.

According to Yonhap News Agency, Lee emphasized that brokerages should not abuse their superior positions and must ensure no improper business practices occur during the resolution of bad loans tied to real estate projects. He stressed the importance of addressing these issues efficiently and highlighted the agency's commitment to inspecting those brokerages that have delayed efforts in resolving the issue or engaged in problematic sales activities.

Local brokerages' exposure to unstable construction development projects amounted to 3.6 trillion won (US$2.5 billion) as of the end of September, based on data from the FSS. The planned inspections aim to ensure financial stability and proper conduct among brokerages involved in such high-risk financial activities.