[2020 National Audit] Eun Seong-su "Financial Supervisory System Reform Should Be Examined in Relation to Government Organization Restructuring"

[Asia Economy Reporter Minji Lee] The Financial Services Commission expressed the opinion that the reform of the financial supervisory system should be considered on a large scale along with the government organization restructuring.

On the 12th, at the National Assembly's Political Affairs Committee audit, Yudongsoo, a member of the Democratic Party of Korea, argued the need for reform of the financial supervisory system, stating, "The biggest problem with the financial supervisory system is that the supervisory enforcement function and the supervisory policy function are separated, so it is not reflected in a timely manner, resulting in a lack of promptness."

On the 12th, Eun Sung-soo, Chairman of the Financial Services Commission, is responding to a question from Yoo Dong-soo, a member of the Democratic Party, during the Political Affairs Committee's national audit.

Rep. Yoo explained, "There is also a mismatch between the Financial Services Commission and the Financial Supervisory Service regarding private equity funds. When the Financial Supervisory Service was conducting on-site inspections and monitoring the selection of concentrated management operators, it was already aware of the Optimus incident, but the Financial Services Commission prepared countermeasures based on the DLF and Lime Management incidents and failed to properly reflect them in policy."

He also pointed out, "In the globalized financial market, the Ministry of Economy and Finance oversees international financial industry policy, while the Financial Services Commission handles domestic financial industry policy, which is inefficient. The Financial Services Commission currently holds both financial industry policy for reform and financial supervision for consumer protection."

He said that from the consumer protection perspective, the environment is such that protection policies cannot function properly. He stated, "The Financial Supervisory Service has a Financial Consumer Protection Department, but independent protection policies are not being implemented. It is necessary to transfer all industrial policy parts to the Ministry of Economy and Finance and establish a Financial Supervisory Committee under the Prime Minister's Office for financial supervisory functions."

Furthermore, Rep. Yoo added, "Among the nine members of the Financial Services Commission, five are insiders. Going forward, measures to increase independence by having a majority of private sector members should also be considered."

In response, Eun Sungsoo, Chairman of the Financial Services Commission, said, "Both the Ministry of Economy and Finance and the Financial Supervisory Service need to be reviewed in connection with the related government organization restructuring," and added, "We will have sufficient consultations with the Financial Supervisory Service regarding incidents and accidents and strive to harmonize both parties in terms of industrial promotion and supervision."

He continued, "I believe there are sufficient advantages to enhancing the independence of the Financial Services Commission members. However, there must be legal validity regarding non-standing private members."

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