[Q&A] Lee Okwon: "Financial Holding Governance TF Will Keep 'Single-Term System for Outside Directors' Open for Discussion"

On National Pension Service Participation in TF:
"All Options for Consideration Remain Open"
On Re-designating the Financial Supervisory Service as a Public Institution:
"Practical for the Competent Ministry to Exercise Control"
Investigative Authority to Be Controlled by Review Committee...
No Expansion Beyond Illegal Private Lending
Household Debt and Mortgage Loan Risk Weightings to Be Strengthened...
"Total Amount Must Be Reduced"

On the 28th, Lee Okwon, Chairman of the Financial Services Commission, stated that the introduction of a single-term system for outside directors could also be discussed by the Task Force (TF) for improving the governance structure of financial holding companies. He also said that the possibility of the National Pension Service participating in the TF remains open for consideration.

Regarding the governance TF reform plan, which is scheduled to be announced next month, Chairman Lee explained that discussions will mainly focus on strengthening shareholder control over the reappointment of financial holding company CEOs and tightening the requirements for shareholder approval when appointing CEOs.

On the issue of re-designating the Financial Supervisory Service as a public institution, he said, "There is a consensus on the need for controls to strengthen public interest and transparency, but from a management perspective, it may be more effective for the Financial Services Commission, as the competent ministry, to take charge," indirectly expressing a negative stance on designating it as a public institution.

Regarding the special judicial police (SJPs) system of the Financial Supervisory Service, he drew a clear line by stating that investigative authority will be controlled through an investigative review committee, the scope will be limited to unfair trading in the capital market and illegal private lending, and expansion into other areas will not be permitted.

On household debt management, he emphasized, "It is important to continuously reduce the total amount," and added, "We are also considering measures to strengthen the risk weighting on mortgage loans."

Lee Okwon, Chairman of the Financial Services Commission, is delivering a New Year's address at the '2026 Pan-Financial New Year Meeting' held at Lotte Hotel in Jung-gu, Seoul, on the afternoon of the 5th. 2026.1.5 Photo by Kang Jinhyung

Chairman Lee made these remarks during a press briefing held at the Government Complex Seoul in Jongno-gu, Seoul, on this day.

The following is a Q&A with Chairman Lee.

-Recently, a financial holding company introduced a shareholder-recommended outside director system. What is your view on this? Do you plan to discuss the single-term system for outside directors in the governance reform TF?

▲The Financial Supervisory Service is currently conducting on-site inspections of financial holding companies. We will develop institutional improvement measures by comprehensively addressing issues identified in the field. If the idea of a single-term system for outside directors is brought up as an agenda item, we will discuss it together.

-The National Pension Service is often a major shareholder of financial holding companies. There are calls for the National Pension Service to participate in the governance TF. What is your view?

▲The TF is composed mainly of academics and experts, and the National Pension Service is not directly included. However, we will keep all options open for discussion, including related issues and the single-term system for outside directors. Whether through open debate or other means, we intend to address all issues that are raised.

-Do you view the CEOs of financial holding companies as part of a corrupt inner circle? Do you think the on-site inspection of BNK Financial Group by the Financial Supervisory Service will affect Chairman Bin Daein's reappointment?

▲I believe financial institutions have an obligation to answer whether the process of appointing holding company chairpersons is truly fair and transparent. The answer should be demonstrated through actions, obligations, and results, not just words. Financial institution CEOs must always be conscious of how to enhance the performance of their institutions in a fair and transparent manner. The inspection by the Financial Supervisory Service of BNK should be viewed as a matter of factual investigation.

-What specific internal controls do you think are necessary for the investigative authority of the Financial Supervisory Service's special judicial police? The Financial Supervisory Service is reportedly planning to establish its own investigative review committee chaired by a deputy governor.

▲The key is how to ensure effective control. From a control perspective, we will seek solutions that are flexible and appropriate. I do not anticipate any major obstacles.

-Is it the official position of the Financial Services Commission that it is preferable for the Commission to exercise control rather than re-designating the Financial Supervisory Service as a public institution?

▲Looking at the concerns raised during last year's government reorganization agenda, there seems to be a general consensus on the need to strengthen democratic controls to ensure the transparency and public interest of the Financial Supervisory Service. Under the Act on the Management of Public Institutions, one way to exercise control is to incorporate disclosure and welfare management into the public institution management system. The level of control should be at least equivalent to or greater than the public institution management system, but the key issue is who should be the controlling body. I believe it is more practical for the competent ministry to be in charge, even if the control level is set at or above that of the public institution designation system. The final decision will be made soon at the upcoming Public Institution Management Committee meeting of the Ministry of Economy and Finance.

-Although household debt figures have somewhat stabilized, some argue that using financial policy to suppress the real estate market is not appropriate. What is your response?

▲Household debt has eased significantly. We must ensure a soft landing so that household debt does not become a potential risk factor for the Korean economy or financial system. First, the growth rate of household loans should not exceed the nominal growth rate. This year, we will significantly strengthen management. It is very important to continue reducing the total amount of debt. We will tighten the risk weighting regulations on mortgage loans for financial institutions, making mortgage lending less favorable. We will also encourage financial institutions to direct funds toward businesses rather than real estate through productive finance.

-What is the annual return target for the National Growth Fund?

▲We are paying close attention to returns, since this is a fund in which the public directly participates in investment. Depending on how we structure dividend income for tax purposes when profits are generated, returns can be higher. It is also important to generate profits through sound management. When selecting asset management companies, we will work with the best players and operate the fund so that government finances serve as a secondary safety net for risks. We will pay special attention to this.

-Are you considering increasing the leverage ratio for index-type leveraged funds from two times to three times?

▲We do not intend to allow triple leverage for single-stock exchange-traded funds (ETFs). Since investor protection is also a priority, we are not considering permitting a three-times leverage ratio.

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