Lee Chan-jin: “The FSS should be designated a state agency like in the U.S. and Japan”

At the start of the year: “I expect it won’t be designated as a public institution”

Lee Chan-jin, governor of the Financial Supervisory Service (FSS), said regarding the issue of “designating the FSS as a public institution” that “personally, the most desirable option would be to make it a state agency like in the United States or Japan, leaving no room for dispute.”

On the 5th, in response to a related question from Rep. Lee In-young of the Democratic Party of Korea during a pending-issues Q&A session of the National Assembly’s National Policy Committee, Lee said, “However, if you look at the fundamental background behind the establishment of the FSS, it is difficult to describe it as a simple private institution, and it is necessary to approach this with the special characteristics of independence and expertise in mind.”

Rep. Lee said, “It would be better to set a long-term position in line with a clear direction on whether the FSS will function as the Board of Audit and Inspection in financial matters, as the police, or as something like the Bank of Korea,” adding, “Even if it were to have investigative authority, including the power to initiate investigations, as special judicial police in order to respond quickly to financial crimes right now, that would be temporary—and in my view it’s not appropriate either.”

Previously, on the 29th of last month, the Ministry of Economy and Finance’s Committee for the Operation of Public Institutions (COPI) deferred designating the FSS as a public institution. The rationale was that it overlaps with the current management and supervisory framework of the Financial Services Commission, the competent authority, and could undermine the autonomy and expertise of financial supervisory work.

At a New Year’s reception at the start of the year, Lee argued regarding the designation as a public institution, “The FSS already has no autonomy when it comes to organization and budget, and the FSC makes all the decisions,” adding, “If it is designated as a public institution, (the Ministry of Economy and Finance, which oversees COPI) would become another layer of oversight.”

He also said, “The neutrality and autonomy of financial supervisory authorities are extremely important values worldwide—a so-called global standard,” and added that he “expects it won’t be designated.”

Roh Jeong-dong, Hankyung.com reporter dong2@hankyung.com