The International Monetary Fund (IMF) has canceled its visit to the Financial Supervisory Service scheduled for the 12th. The FSS union had planned to deliver a letter to the IMF mission to raise concerns that the government's organizational overhaul could undermine the FSS's independence, but the plan fell through after the IMF canceled its visit.
According to the financial sector on the 11th, the IMF recently informed the Ministry of Economy and Finance of its intention to cancel the visit to the FSS, and decided to hold the annual consultation schedule remotely.
It appears to reflect a decision not to get caught up in the controversy over the reorganization of the financial authorities. An official at the Ministry of Economy and Finance said, "It was at the IMF's request," and added, "The IMF is also very well aware of the situation in Korea, and after receiving the IMF's request, we consulted with the FSS and decided to hold it by video."
The reason FSS employees are trying to appeal to the IMF over the reorganization issue is that the organization known as the FSS was launched at the IMF's recommendation. During the 1997 foreign exchange crisis, the IMF demanded the integration of financial supervisory bodies to strengthen financial soundness, and the Kim Dae-jung administration accepted the recommendation and established it as an independent body in 1999. The FSS was designated as a quasi-public institution once in 2007 under the Roh Moo-hyun administration, but amid controversy over damage to its independence, it was removed from the list of public institutions two years later in 2009.
FSS employees believe that the reorganization plan to spin off the consumer protection function from the FSS to create the Financial Consumer Protection Agency (FCPA) and to designate both the FSS and the FCPA as public institutions runs counter to the IMF's recommendation.