Financial Services Commission likely to separate policy and supervisory functions

Ruling party and government discuss reorganization plan for economic ministries

Policy functions likely to be transferred to the Ministry of Economy and Finance

It was confirmed on the 1st that the government and the ruling party have apparently settled on effectively splitting the Financial Services Commission. It is reported that policy functions would be absorbed by the Ministry of Economy and Finance, while financial supervisory functions would likely be integrated with the Financial Supervisory Service.

Democratic Party lawmakers on the National Assembly's Political Affairs Committee held a party-government meeting at the National Assembly with the Presidential Office and government officials to discuss the reorganization plan for economic ministries. Kang Jun-hyun, the Democratic Party secretary of the committee, said, "There was a degree of consensus on the proposals repeatedly discussed by the State Affairs Planning Committee," and added, "We agreed on something like a draft." The State Affairs Planning Committee's proposal reportedly contains provisions to transfer the domestic financial policy area of the Financial Services Commission's duties to the Ministry of Economy and Finance and to combine the remaining FSC organization with the Financial Supervisory Service to reorganize into a Financial Supervisory Commission. Kang said, "We discussed the division of roles and functions in the process of separating the Financial Intelligence Unit (FIU), the Financial Supervisory Service, and the Financial Consumer Protection Agency." He also said, "The law establishing the Financial Services Commission will need to be (amended) in the future, and there are many parts of the Bank Act that need to be revised."

One participant said, "There were no disagreements among the ruling party lawmakers who participated in the party-government meeting," adding, "It can be seen that opinions have converged toward splitting the FSC." The Democratic Party announced that it would handle the Government Organization Act at the plenary session on the 25th. Some have raised suspicions that the party-government discussions on reorganizing the FSC are out of sync, as President Lee Jae-myung's nominee for FSC chairman, Lee Eok-won, is scheduled to have his confirmation hearing on the 2nd. A senior Democratic Party official said, "If the nominee successfully completes the confirmation hearing, he will discuss the financial organization reorganization together as a member of the Lee Jae-myung administration," and "there are no differences between the party and the government."

Choi Hyung-chang/Lee Si-eun reporters calling@hankyung.com