Financial Supervisory Service Gov. Choi Soo-hyun and Financial Services Commission chairman Shin Je-yoon may consider themselves unfortunate, as they are burdened with the role of leading Korea’s financial industry at a difficult time.
Shin and Choi would have celebrated their first inauguration anniversary amid much fanfare this week, if it were not for the sluggish economic performance and the escalating pressure for their resignation.
Instead of celebrations, the two chiefs have chosen to remain low key, allowing themselves the spotlight only when announcing new preventive measures or slapping penalties on guilty culprits.
“We do not plan to hold celebrations or press briefings marking the chairman’s inauguration anniversary this Saturday,” an FSC official told The Korea Herald.
The situation at the FSS is gloomier than at the FSC, as a senior FSS official appears to have been actively involved in the massive KT ENS loan fraud scandal.
The two chiefs kicked off their three-year terms in high spirits in 2013 following their appointments by President Park Geun-hye. However, they were soon hit by a tsunami of financial scandals, including the Tong Yang investigation and the latest personal information leak at major card companies.
To make things worse, the prosecution confirmed earlier this week that part of the leaked information had not been contained, and was therefore open to the risk of further abuse.
This was precisely contrary to what Choi and Shin had said earlier.
The two had repeatedly said that none of the leaked information would be abused.
The side-effects of the information breach are now touching off criticism from civic groups and opposition parties, who believe that Shin and Choi, together with Deputy Prime Minister Hyun Oh-seok, should take responsibility and step down.
Instead, the heads of the financial companies where the leaks had occurred resigned.
But even without the scandals, the local financial industry has not been in great shape.
The total net profit of the top 11 financial holding companies as of the end of 2013 was 4.2 trillion won ($3.9 billion), half the 8.4 trillion won recorded in 2012, according to the FSS.
Despite the humble performance the two top officials were also praised for mapping out the country’s long-term financial blueprint and promoting financial consumers’ basic rights.
Shin highlighted the importance of sustainable knowledge-based finance and urged the financial sector to move beyond their conventional loan businesses.
He also suggested the establishment of an independent organization devoted to the protection of financial consumers’ rights, though the related bill failed to pass the National Assembly.
FSS leader Choi introduced a tight monitoring system in efforts to eradicate irregularities and prevent potential financial crimes. It was due to this reinforced system that the watchdog detected the KT ENS loan fraud case.
“Our efforts were rendered meaningless in the face of the information leak scandal,” said a FSS official.
The FSC and FSS chiefs may seem to be rowing in the same boat, but some observers speculated that Shin may be better off than Choi, who also has to deal with accusations against his officials in addition to the aftermath of the information leak.
Last week, Shin was appointed chairman of the Financial Action Task Force on Money Laundering and a member of the International Financial Reporting Standards’ supervisory board.
By Bae Hyun-jung (email@example.com