100 Days in Office: Jeong Eun-bo, FSC Chairman... Mixed Reviews on Market-Friendly Policies

Market Reacts Positively to Emphasis on Support Over Regulation
Civil Groups Oppose Measures Seen as Setbacks to Financial Consumer Protection

[Asia Economy Reporter Jin-ho Kim] Opinions are divided over Jeong Eun-bo, Governor of the Financial Supervisory Service (FSS), who has passed 100 days in office, and his "market-friendly policies." While the market positively evaluates his emphasis on support rather than regulation of financial companies, civic groups are raising their voices, calling his approach a step backward in protecting financial consumers.

According to the financial sector on the 14th, Governor Jeong marked his 100th day in office on the 12th. Since his inauguration, he has emphasized the importance of prior supervision and risk prevention over strong punishment, regulation, and ex-post supervision of financial companies.

In his inaugural remarks, he urged employees that the essence of financial supervision lies in support rather than regulation, and in meetings with major financial holding company chairpersons and bank presidents, he promised support over regulation.

In particular, on the 3rd, during a meeting with financial holding company chairpersons, Governor Jeong announced plans to make the FSS inspection system more flexible and adaptable. Rather than pushing financial companies through comprehensive inspections, he stated that inspection cycles, scope, and methods would be reasonably adjusted according to the characteristics of each financial sector, such as company size and complexity of business, emphasizing prevention over ex-post punishment.

After the meeting, he told reporters, "We aim for a sophisticated and balanced inspection system," adding, "We will expand communication with financial companies during inspections and sanction deliberations, and flexibly adjust inspection cycles for small financial companies such as savings banks within holding companies."

At a meeting with major bank presidents on the 9th, he also emphasized preventive supervision, announcing plans to strengthen continuous monitoring functions and adopt a risk-centered inspection policy. This is interpreted as a signal to the market that he will approach financial supervision in a completely different way from his predecessor, former Governor Yoon Seok-heon.

Based on this, the FSS has planned to announce the results of its review of the financial company inspection and sanction task force (TF) within the year. As Governor Jeong previously stated, the core is to reform the FSS inspection system from ex-post measures to proactive risk identification and prevention.

The market's response is positive. It appreciates the approach of engaging with the industry and actively providing support rather than merely imposing regulations. A banking sector official said, "While understanding that consumer protection is the financial authorities' most important responsibility, comprehensive inspections akin to a 'fishing expedition' are problematic," adding, "It is positive that the financial authorities are taking steps to improve this."

However, civic groups oppose Governor Jeong's announcement to reform comprehensive inspections, arguing that it is a measure that goes against protecting financial consumers. The Financial Justice Solidarity stated, "In 2015, the Financial Services Commission relaxed regulations and abolished comprehensive inspections, which caused a tsunami of large-scale private equity fund damages," criticizing, "Repeating this despite knowing the consequences of deregulation is tantamount to condoning illegal acts by financial companies."

Meanwhile, Governor Jeong's future challenges include lawsuits related to losses from overseas interest rate-linked derivative-linked funds (DLF), sanctions on financial companies involved in the Lime and Optimus fund incidents, uncertain domestic and international financial market variables such as household debt, and personnel stagnation within the FSS.

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