Koh Seung-beom, the new chairman of the Financial Service Commission, speaks during a forum jointly held by Shinhan Financial Group and the Institute for Global Economics, Thursday at Lotte Hotel in central Seoul. (Yonhap)
Koh Seung-beom, the new chairman of the policymaking Financial Services Commission, vowed Thursday to bolster cooperation with the market watchdog Financial Supervisory Service in a gesture to ease the long-standing power struggle between the two agencies.
“I’ve stressed that the FSC and FSS should move in unison. As the FSC’s new head, I will ramp up efforts to strengthen communication with the FSS’ chairman in terms of promoting financial policies,” Koh told reporters after taking part in a forum jointly held by Shinhan Financial Group and the Institute for Global Economics.
On Aug. 6, Jeong Eun-bo, who had previously served as the nation’s top negotiator in defense cost-sharing talks with the US, took office as the FSS’ new chief upon the recommendation of former FSC Chairman Eun Sung-soo with the approval of President Moon Jae-in.
Koh’s remarks reflected market concerns over an escalation of tension between the nation’s financial authorities in recent years.
Since former FSS Gov. Yoon Suk-heun, considered a hard-line financial industry reformist, took office in May 2018, the two financial bodies have clashed on key policy issues, including the FSS’ authority to conduct comprehensive inspections of financial companies as well as its budgetary independence.
In 2008 the South Korean government’s financial supervisory functions were split between the FSC, an administrative agency responsible for establishing financial policies, and the FSS, a special corporation technically under the FSC’s control and designed to implement the financial regulator’s major policies.
Meanwhile, the two agencies are less likely to show signs of discord in financial policy management owing to the personal ties between their new chiefs.
Both of them passed the civil service exam in 1984 and built their careers in the Finance Ministry and the FSC. Industry sources say their common experiences as economic bureaucrats will help them build cooperative relations.
In an apparent attempt to soothe public fears over the nation’s soaring household debt, the new financial chiefs held a closed-door meeting at the government complex in Seoul and shared views on how to rein in household debt and deal with the CEOs of local financial firms that were involved in private fund misselling scandals. It was their first bilateral meeting since taking on their respective posts.
After the meeting Jeong was asked to comment on the possibility of lighter FSS penalties for the CEOs, considering the case of Woori Financial Group Chairman and Chief Executive Officer Sohn Tae-seung. Sohn recently won an administrative lawsuit against the FSS, which had reprimanded him because his institution missold derivatives-linked products.
“I will closely look into the matter and make a decision on whether to lighten penalties, in partnership with the FSC,” Jeong said after the meeting.
Sohn filed a court injunction in March 2020 challenging the reprimand.
By Choi Jae-hee (firstname.lastname@example.org