[Column] Financial Association President, Whose Position Is It For?

[Asia Economy Reporter Kim Hyo-jin] "The position of chairman feels like it has been reduced to a 'career stepping stone'." This is an observation from a commercial bank official regarding the appointment of the next chairman of the Korea Federation of Banks. Amid the lingering shadows of the so-called 'Gwanpia' (bureaucrat-mafia), 'dividing the spoils,' and 'parachute appointments'?which have become almost traditional?controversy over 'Jeongpia' (political-mafia) has further deepened the confusion.

The candidates for the chairman of the Korea Federation of Banks have been narrowed down to seven: Kim Kwang-soo, Chairman of NH Nonghyup Financial Group; Lee Jung-hwan, President of Korea Housing Finance Corporation (both former bureaucrats); Kim Byung-ho, former Vice Chairman of Hana Financial Group; Min Byung-duk, former President of KB Kookmin Bank; Shin Sang-hoon, former President of Shinhan Financial Group; Lee Dae-hoon, former President of NH Nonghyup Bank (all former bankers); and Min Byung-doo, former member of the Democratic Party. The lineup consists of three former bureaucrats and politicians and four former bankers.

Within the banking sector, the prevailing view is that those from bureaucratic or political backgrounds might have an advantage. A banking official hinted, "The grip of the current administration is so strong that bank presidents are very cautious and watchful." The fact that Lee Jung-hwan, President of Korea Housing Finance Corporation, has recently emerged as a strong candidate is not unrelated to this trend. Lee is noted within and outside the financial sector as a member of the 'Bugumhoe,' gaining attention due to his regional ties with President Moon Jae-in.

There is also much speculation surrounding former lawmaker Min Byung-doo. A senior official at a commercial bank said, "I have no idea why Min, who has no experience in banking or financial fields, should lead the Korea Federation of Banks," adding, "It is hard to recognize his role as chairman of the National Assembly's Political Affairs Committee as financial experience."

The Korea Federation of Banks is a non-profit corporation funded by membership fees from banks and serves as a representative body for the banking sector. Historically, no politician has ever served as its chairman. Min previously criticized the practice of political patronage appointments during the former administration. Within the banking sector, a self-deprecating slogan circulates: "From government-controlled finance to the era of full-fledged political finance." There are constant rumors that political 'memos' related to the chairman appointment are being sent to the banking sector through various channels.

It is not only the Korea Federation of Banks. For the next chairman of the Life Insurance Association, Jeong Hee-soo, a three-term lawmaker from the Grand National Party and head of the Insurance Training Institute, is a leading candidate. The selection of former Korea Exchange Chairman Jeong Ji-won as the next chairman of the General Insurance Association and the appointment of former Financial Supervisory Service Senior Deputy Governor Yoo Kwang-yeol as CEO of SGI Seoul Guarantee Insurance have also sparked controversies over 'Gwanpia dividing the spoils.'

Controversies over parachute appointments in financial public enterprises persist. A representative case is the appointment of Lee Han-gyu, former policy chief of the Democratic Party and aide to lawmaker Kim Jin-pyo, as auditor of the Korea Deposit Insurance Corporation. This position, which is second-in-command after the head and responsible for overseeing the institution's operations, has been openly politicized.

A financial sector official sarcastically remarked, "Seeing all sorts of unrelated people poking around or settling in here and there, it feels like a big marketplace has opened in the financial sector." The long-standing practices that hinder financial advancement are once again regressing like this.

This content was produced with the assistance of AI translation services.