[2022 National Assembly Audit] Lee Bok-hyun, Financial Supervisory Service Chief: "Bank Executives Perceive Internal Control as a Cost Issue"
Financial Supervisory Service Governor Lee Bok-hyun is attending the National Assembly's audit of the Financial Supervisory Service held on the 11th, responding to lawmakers' questions. Photo by Yoon Dong-joo doso7@
View original image[Asia Economy Reporters Song Hwajeong and Song Seungseop] Lee Bokhyun, Governor of the Financial Supervisory Service (FSS), stated regarding the strengthening of banks' internal controls, "I hold the opinion that not only should obligations related to internal controls be imposed, but there should also be a legal basis for obligations concerning management and compliance."
On the 11th, during the National Assembly's Political Affairs Committee audit, in response to Democratic Party lawmaker So Byungchul's criticism that the current internal controls of banks are ineffective, Governor Lee said, "(Since my appointment as FSS Governor) although it has been a short period, I have felt concerns that top management perceives internal controls practically as a cost in terms of short-term management performance." He added, "Banks formally classify dedicated personnel or costs for internal control systems, but their arbitrary classification falls far short of the standards and figures we have."
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Governor Lee continued, "We have conducted extensive technical research on internal controls and are currently discussing with the financial sector to reflect those findings," explaining, "Step by step, compared to advanced countries, we are internally discussing how to inform the public about the differences in internal control costs among financial institutions, how these internal costs are being spent, and how personnel management is conducted." He further added, "We will also look into methods to incorporate key performance indicators (KPIs) not only at the branch level but also at the upper management level."
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