Tensions between the Financial Services Commission and the Financial Supervisory Service are intensifying, prompted by the rollout of plans to advance the governance of financial holding companies. In the financial sector, some say the power struggle between Lee Eog-weon, chair of the Financial Services Commission, and Lee Chan-jin, governor of the Financial Supervisory Service, led to the delay in announcing the advancement plan.
Within the Financial Supervisory Service (FSS), complaints reportedly surfaced that even the working-level departments did not know the timing of the announcement of the advancement plan. On top of that, word of the governor's remarks about allowing autonomous reorganization of the FSS became known, fueling speculation of conflict between the heads of the financial authorities.
According to the financial authorities on the 27th, the Financial Services Commission (FSC) is fine-tuning the timing of the announcement while supplementing the plan to advance the governance of financial holding companies. The FSC formed a task force (TF) in Jan. last year and has been preparing governance advancement measures, including restricting self-extensions of terms by financial holding company chairs.
On the 11th, the Financial Services Commission (FSC) notified reporters that it would announce the advancement plan the next day, the 12th, but canceled it about four hours later. At the time, the FSC said it was "to reschedule the meeting with financial holding company chairs." An FSC official said, "There were some parts that needed to be supplemented."
Because it was unusual for the FSC to abruptly cancel the schedule for a major policy announcement, various interpretations emerged in the financial sector. Some said the FSC set the announcement during the governor's overseas trip, despite differences over the advancement plan, and then canceled it. The governor was on an overseas trip from the 9th to the 12th to attend a Basel Committee on Banking Supervision meeting.
There is also talk that the governor sought strong measures such as banning a third consecutive term for financial holding company chairs, but that this was not reflected in the FSC's final announcement. A senior official at the financial authorities said, "It is not true that there was an attempt to announce the advancement plan while the governor was away. The governor's overseas schedule had already been set when the TF began."
It is said that even the working-level departments of the Financial Supervisory Service (FSS) that participated in the TF were not informed in advance of exact details such as the timing of the advancement plan announcement. There is also talk that a senior figure at the presidential office was involved in the FSC's announcement being canceled after four hours. In this process, the governor is said to have communicated with the presidential office. The governor and President Lee Jae-myung passed the bar exam in the same year. The governor has reportedly mentioned on several occasions in private that he frequently exchanges views with the president on financial policy.
The Financial Services Commission (FSC) also differed with the Financial Supervisory Service (FSS) over granting the FSS's special judicial police investigatory authority to initiate cases. The fact that the FSS was excluded from the new-year work briefing for agencies under the FSC further fueled speculation of conflict between the two sides.
At a recent town hall meeting attended by young FSS employees, when asked about a plan to make FSC consultation mandatory for FSS organizational restructuring, the governor reportedly said, "Organizational restructuring is the FSS's authority." Some interpreted this as a subtle tug-of-war with the FSC. In response, the FSS distributed an explanatory note saying, "That is not true."
An official at the financial authorities said, "The governor is very mindful of and concerned about being seen as in conflict with the FSC. The instruction is to cooperate actively with the FSC and handle business smoothly."