MOIS Declares "Separate Institutions"... Skepticism Grows Over Personnel Exchanges Between FCPA and FSS After Launch

Challenges Persist Beyond Next Year’s Restructuring
Essential to Maintain Employee Motivation and Prevent Instability
Uncertain Impact on Expertise and Organizational Cohesion

Although Lee Chanjin, Governor of the Financial Supervisory Service, has emphasized his intention to actively promote personnel exchanges even after the establishment of the Financial Consumer Protection Agency (FCPA), skepticism is spreading within the Financial Supervisory Service. This is because the Ministry of the Interior and Safety has designated the FCPA and the Financial Supervisory Service as "separate public institutions," making active personnel exchanges between the two organizations realistically difficult.

Yoon Hojung, Minister of the Ministry of the Interior and Safety (right), and Han Jeongae, Chair of the Policy Committee of the Democratic Party of Korea, are announcing the results of the 3rd High-level Party-Government Council and the government organization reform plan on the 7th at the Government Complex Seoul in Jongno-gu, Seoul. Photo by Yonhap News

On September 9, many employees of the Financial Supervisory Service expressed their dismay, saying they felt demoralized by the organizational restructuring scheduled for next year, which centers on the separation of the Financial Consumer Protection Bureau. An executive commented, "First, we need to calmly assess the situation," while another staff member shared concerns that "the organizational atmosphere may become unstable, as younger investigators are considering moving to private financial firms."

Concerns intensified especially after the High-level Party-Government Council held on the 7th, when Lee Changgyu, Director of the Organization Bureau at the Ministry of the Interior and Safety, clearly stated that the FCPA and the Financial Supervisory Service would be "separate institutions." Although Governor Lee proposed active personnel exchanges as a solution to prevent unrest among employees, in reality, it is difficult for two separate agencies to freely operate personnel dispatches and rotational assignments.

Moreover, the Financial Consumer Protection Bureau is unpopular among employees because it frequently deals with malicious complaints and offers limited opportunities to gain experience in supervision and inspection work. The number of staff, currently around 400, is expected to increase after the FCPA becomes independent. There is a high possibility that many personnel from the supervision and inspection departments, which are considered attractive assignments, will be transferred. Unlike the current system, where employees rotate within the Financial Supervisory Service among the inspection, supervision, and consumer protection departments, the new structure would require them to be dispatched to a different public institution. This has heightened a sense of crisis among employees, who fear that "once you leave, it's hard to come back."

The FCPA is also reluctant to engage in personnel exchanges. New employees who join the FCPA and rotate only internally have limited opportunities to gain a comprehensive understanding of overall financial supervision issues beyond dispute mediation. It is difficult to develop a broad perspective on sector-specific supervision, such as banking, insurance, securities, asset management, and accounting, as well as on governance. This is why there are concerns that even if FCPA employees are dispatched to the Financial Supervisory Service, it will be hard to generate synergy.

An employee from the Financial Consumer Protection Bureau remarked, "Currently, people come to the bureau after gaining experience in both inspection and supervision, but if the FCPA is launched as a separate agency, career management will inevitably be disrupted. It is uncertain how active exchanges between institutions will be."

Specific guidelines regarding the regularization of personnel exchanges, the scale of exchanges, whether executives will be included, and the mandatory dispatch of junior employees have not yet been established. As a result, there are growing calls for the Financial Supervisory Service, the Financial Consumer Protection Bureau, and the labor union to discuss detailed measures before the FCPA is launched on January 2 next year. A representative of the Financial Supervisory Service labor union pointed out, "After the establishment of the FCPA, the dispersal of human resources, internal conflicts, and a decline in employee morale are inevitable. There are serious concerns that this may become a typical case of the negative effects of splitting an organization, with only blame-shifting left behind."