Revival of Gwanpia to Shield Government from External Pressure... Attention on New Heads of Jugeumgong and Nonghyup Financial

Housing Finance Corporation Accepting Applications for Next President Until 4th
NH Nonghyup Financial Group Also Proceeding with Next Chairman Election Process

Kim Kwang-soo, the newly appointed chairman of the Korea Federation of Banks, is arriving for his first day at the Bankers' Hall in Jung-gu, Seoul, on the 1st. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Park Sun-mi] As the heads of major financial organizations have been dominated by Gwanpia (bureaucrats + mafia), attention is focused on the successor appointments at the Korea Housing Finance Corporation and NH Nonghyup Financial Group, which have begun the process of leadership changes.

Since most of the former heads of these two institutions were from Mofia (a portmanteau of MOF, the former Ministry of Finance’s English abbreviation, and mafia) and Gwanpia backgrounds, the market expects that the successors will likely also be former government officials. Although no concrete rumors have emerged yet, it is anticipated that controversy will be inevitable depending on the results of the association head appointments.

According to the financial sector on the 1st, the Korea Housing Finance Corporation will close applications for the next president position, succeeding CEO Lee Jeong-hwan, at 6 p.m. on the 4th. In accordance with internal regulations requiring the formation of an executive recommendation committee (ERC) two months before the expiration of the president’s term to begin the appointment process, the corporation has already established the ERC. Lee’s term expires on January 2 of next year.

The ERC will review the submitted applications and conduct interviews before recommending multiple candidates for the next president to the Financial Services Commission. The president of the Korea Housing Finance Corporation is appointed by the president of the country upon the recommendation of the Financial Services Commission chairman.

Since the public recruitment application deadline has not yet passed, there are no prominent candidates mentioned as of now. However, by precedent, it is highly likely that a candidate from the Financial Services Commission or Ministry of Economy and Finance bureaucrats will be appointed. Except for the inaugural president Jeong Hong-sik, the Korea Housing Finance Corporation has been led by presidents from bureaucratic or Bank of Korea backgrounds. Lee is no exception. Having entered public service through the 17th Administrative Examination, Lee has held positions such as Director General of the Treasury Bureau at the Ministry of Strategy and Finance, Economic Counselor at the Organisation for Economic Co-operation and Development (OECD), Director of the Policy Situation Office at the Office for Government Policy Coordination, and Chairman of the Korea Exchange before assuming the presidency of the Korea Housing Finance Corporation in January 2018. Although no president has ever been reappointed, it is not legally impossible, so there is speculation that Lee might be reappointed.

Kim Kwang-soo, the new chairman of the Bankers Association, 'first day at work'
NH Nonghyup Financial Group proceeds with next chairman selection

NH Nonghyup Financial Group is also conducting the selection process for the next chairman to succeed former chairman Kim Kwang-soo, who began his term as chairman of the Bankers Association on the same day. Kim In-tae, Executive Vice President and Head of the Management Planning Division, is currently acting as interim chairman. On the 27th of last month, Nonghyup Financial held an executive candidate recommendation committee meeting to initiate the management succession process. They are currently searching for candidates both internally and externally. The committee must complete the final candidate recommendation process within 40 days of the start of the succession procedure. This means the final candidate for the next chairman is expected to be decided by the end of this month or early next month at the latest.

There is talk that for Nonghyup Financial’s growth, an internal promotion candidate should assume the chairman position to leverage the financial group’s expertise. However, following precedent, it is highly likely that an external candidate with a senior bureaucratic background will be included in the final candidate pool. Although Nonghyup Financial is not a public institution, it operates policy funds and returns profits to farmers, giving it a strong public character, and thus bureaucrats have traditionally held the chairman position.

The fact that the National Agricultural Cooperative Federation, which receives government funding, is the major shareholder also means that candidates who can maintain close ties with the government are preferred. Except for the inaugural chairman Shin Chung-sik, the chairmanship has traditionally been held by bureaucrats from the Ministry of Strategy and Finance’s predecessor, the Ministry of Finance and Economy. Therefore, there is a widespread perception that a bureaucrat will be elected as the new chairman this time as well.

Moreover, with former chairman Kim being elected as chairman of the Bankers Association, the Nonghyup Financial chairman position has become an ideal post for traditional bureaucrats to gain private financial company experience, making it even more popular among bureaucrats. This is also why there is speculation that a well-known bureaucrat will be considered during the year-end ministerial reshuffle.

Although there was once a strong wave of criticism leading to a clear decline of Mofia and Gwanpia influence across the financial sector, it appears that Mofia and Gwanpia are now making a complete comeback in the financial industry, shielding the government from external pressures. Following the election of Jeong Ji-won, an economic bureaucrat, as the next chairman of the General Insurance Association, and Kim Kwang-soo as chairman of the Bankers Association, Jeong Hee-soo, a three-term National Assembly member and former chairman of the National Assembly’s Finance and Economy Committee, has been nominated as president of the Life Insurance Association. Additionally, Yoo Kwang-yeol, former senior deputy governor of the Financial Supervisory Service, has been appointed as the new CEO of SGI Seoul Guarantee Insurance.

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