[Reporter’s Notebook] Embarrassing Evasion of Responsibility by the FSS Governor

Failed to Address Institutional Loopholes and Lacked Proper Oversight
Yoon Seok-heon, FSS Governor: "Traffic Signal Violations Are Not the Police's Responsibility."
If Only Penalties Are Increased, Drivers Will Inevitably Avoid That Route...

[Asia Economy Reporter Park Sun-mi]"Traffic signal violations are not the police's responsibility."

On the 17th, Yoon Seok-heon, Governor of the Financial Supervisory Service (FSS), retorted this statement during the National Assembly's Political Affairs Committee plenary session when criticized by Kim Hee-gon, a member of the People Power Party, for the financial authorities' negligence in managing private equity funds. Governor Yoon added, "We (FSS) do bear some responsibility, but it cannot be considered the greatest. The fault lies more with the sales companies that sold the products improperly to consumers," thereby evading responsibility.

Of course, the police cannot be held responsible for the increased number of traffic signal violation notices. Primarily, the responsibility lies with the drivers who violated the signals. However, it is inappropriate for the FSS Governor, who holds supervisory responsibility over private equity fund sales companies, to use this analogy. Behind this private equity fund incident, there was an institutional loophole that made it difficult for the sales companies, such as banks, to access how the private equity funds were being managed.

The FSS also failed to respond adequately to this institutional loophole and did not identify problems during the management and supervision process before the incident occurred. This is why criticism arises that it is an irresponsible analogy to blame only the drivers for signal violations before properly identifying the causes, such as why the number of traffic signal violation notices increased or whether road design and traffic signals were inadequate, leading to many traffic accidents.

The FSS is currently conducting disciplinary hearings on the private equity fund sales companies involved in the incident and is promoting responsible management by financial companies as a major task this year. They are also reviewing measures to clearly define the scope of responsibility of sales company executives (name and position) in advance for tasks where consumer damage frequently occurs. This is interpreted as a will to eliminate ambiguity in future punishments by clarifying the scope of responsibility.

It does not look good for the FSS, which failed to fulfill its management and supervisory responsibilities in the private equity fund incident, to emphasize only responsible management by financial companies regarding the Financial Consumer Protection Act (FCPA) effective from March 25. It is necessary to reconsider the criticism that the FSS is hastily holding disciplinary hearings on private equity funds and focusing solely on punishing bank CEOs.

If penalties are only strengthened for a series of signal violation accidents in a certain road section, drivers will inevitably avoid that route. This is similar to the current phenomenon where the financial sector is reluctant to sell private equity funds. It only hinders the development of the financial industry.

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