"A Dedicated Vice Minister-Level Independent Ministry for Regulatory Reform Should Be Established in the Next Government"

Hankyung Research Institute Advocates in 4th Industrial Revolution and Regulatory Reform Report
Need to Accumulate Government's Regulatory Reform Know-How
"Promote Removal of Siloed Regulations and Adoption of Comprehensive Negative System"

[Asia Economy Reporter Kim Heung-soon] There has been a call for the establishment of an independent vice-ministerial-level department specializing in regulatory reform to be promoted in line with the 4th Industrial Revolution in the next government.

The Korea Economic Research Institute (KERI), under the Federation of Korean Industries, stated in its report "The 4th Industrial Revolution and Regulatory Reform," released on the 2nd, that "to actively embrace the changes of the 4th Industrial Revolution era, an independent administrative organization with expertise that can consistently pursue regulatory reform regardless of the administration is necessary." It emphasized the need to establish a vice-ministerial-level independent regulatory reform department within the Office for Government Policy Coordination.

The report argued, "It is difficult to accumulate know-how on regulatory reform through personnel rotation and secondment," and "the establishment of an independent vice-ministerial system is also necessary to cultivate bureaucrats with expertise in regulatory reform."

KERI noted that while the current regulatory sandbox system (which exempts or defers existing regulations for companies for a certain period) "plays a positive role in accommodating changes brought by the 4th Industrial Revolution, reducing dependence on this system is the proper direction for regulatory reform."

It stated that proactively revising regulations in new industry convergence fields to reduce the need to use the regulatory sandbox’s special exceptions is a more desirable form of regulatory reform than having many cases under the regulatory sandbox.

In the report "Trends in Digital Financial Innovation and Policy Implications," released on the same day, KERI pointed out that "if there is no change after the regulatory exemption period allowed by the regulatory sandbox ends, the business becomes practically impossible," and emphasized the need to find ways to resolve uncertainty.

It also proposed that "the next government should secure a mechanism that automatically extends the regulatory exception period in cases where regulatory relief is delayed due to unforeseen circumstances."

The report recommended to the next government that "it is difficult to adapt to the rapidly changing technological environment with the current case-by-case regulatory relaxation approach," and urged the full implementation of a principle-based 'comprehensive negative system' that allows everything except prohibited matters.

Senior Research Fellow Lee Tae-gyu of KERI stressed, "The shift to function-based regulation fundamentally changes the framework of financial regulation, so it must be thoroughly reviewed from a long-term perspective," and added, "The next government should start this work as soon as possible."

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