The Democratic Party of Korea and the government decided to withdraw the overhaul of the financial supervision system that they had pursued as part of a government reorganization plan. They scrapped the plan to restructure the Financial Services Commission into a Financial Supervisory Commission and transfer the commission's domestic financial policy function to a newly established Ministry of Finance and Economy. They also decided not to proceed with a plan to separate the Financial Supervisory Service's conduct-of-business supervision function and establish a Financial Consumer Protection Agency.
Ahead of a plenary session of the National Assembly on the 25th, after the People Power Party signaled a filibuster (a lawful delay of proceedings through unlimited debate) against the government organization law revision bill, a revised bill reflecting the opposition's stance was submitted. With a meeting between the floor leaders of the ruling and opposition parties scheduled for the afternoon under the chairmanship of the National Assembly speaker, attention is on whether an agreement on the government organization law will be reached before the plenary session.
Han Jeong-ae, the Democratic Party policy committee chair, said in a briefing after an "emergency party-government consultative meeting" at the National Assembly on the morning of the day, "Swift handling of the government reorganization is crucial for stability, but given the current ruling-opposition confrontation where even a filibuster and a fast track are being considered, we judged that the reorganization should not become fodder for wasteful political strife and national division."
Han said, "In particular, finance plays an important role in overcoming the economic crisis, and there was a shared view that it is unacceptable to leave finance-related government organizations in an unstable state for more than six months," adding, "The party and government decided not to include in this government reorganization the separation of the Financial Services Commission's policy and supervision functions and the establishment of a supervisory body for a Financial Consumer Protection Agency, which we had sought to push as a fast-track item."
She continued, "The party and government will prepare a revised bill reflecting this content and submit it to the plenary session," and asked the opposition, "As the government and ruling party adjusted the pace of the reorganization out of respect for the opposition's views, please come to the table for talks."
Previously, the government reorganization plan announced on the 9th of this month called for splitting the Ministry of Economy and Finance into a "Ministry of Planning and Budget" and a "Ministry of Finance and Economy," transferring the budgeting function to the Ministry of Planning and Budget, and having the "Ministry of Finance and Economy" absorb the Financial Services Commission's domestic financial policy. The plan also called for restructuring the commission into the Financial Supervisory Service, which would handle only financial supervision, and separating the Financial Supervisory Service's consumer protection function to set up a separate Financial Consumer Protection Agency. The party and government had planned to pass the government organization law revision bill at the plenary session on the 25th and implement the restructuring of the Ministry of Planning and Budget, the Ministry of Finance and Economy, and the Financial Supervisory Commission starting Jan. 2 next year.
However, it was expected to be difficult to handle the related bills because the People Power Party holds the Chairperson posts of both the National Policy Committee and the Strategy and Finance Committee, the standing committees with jurisdiction to discuss the "Financial Supervisory Commission Establishment Act," among others. The Democratic Party's plan was to push the bills by designating them for a fast track (expedited processing), which would take at least 180 days (six months). Even if the government organization law is revised, the new financial supervisory system would not be able to launch normally until April next year. Not only in politics but also in the financial industry, there were pointed out concerns that confusion would be inevitable in the financial policy and supervision institutional sector.
It appears that the party and government hurried into a meeting on the very day of pushing the government organization law revision out of concern that uncertainty over overall economic policy could grow if the legal changes for the reorganization were handled in sequence. Han explained, "It is not appropriate for the financial organization to remain unstable for more than six months, and it was considered desirable to handle it, if possible, through a bipartisan agreement."
The presidential office conveyed similar concerns. Kim Byung-wook, the presidential office's senior secretary for political affairs, said, "I understand that Chief of Staff Kang Hoon-sik reported (this situation) to President Lee Jae-myung," adding, "Since the launch of the Lee Jae-myung administration, expectations for finance and the capital market have been high, and in this situation, the continued instability for six to seven months as the National Assembly talks about reorganization is indeed a heavy burden from the perspective of the government and the ruling party."
Still, they left room to discuss later the government reorganization that would separate the Financial Services Commission's domestic financial policy function. Han said, "It was too tight on time to discuss up to that point," adding, "We will discuss the matter later with the relevant standing committees and consider how to proceed."
The party and government said that instead of including the establishment of a Financial Consumer Agency in this revision, they will first prepare and proceed with measures to enhance public interest and transparency in the consumer protection function within the financial supervisory system without changing the law.
With the government and ruling party stepping back from the financial supervision system overhaul, the ball is now in the People Power Party's court. The People Power Party had planned to counter the government organization law revision bill with a filibuster. Song Eon-seok, the People Power Party floor leader, criticized it at an on-site supreme council meeting held in Daejeon on the morning of the day as "a hasty organizational malfeasance based on hatred and vengeance against the prosecution, the Ministry of Economy and Finance, and Korea Communications Commission Chairperson Lee Jin-sook."
However, with the ruling party submitting a revised bill that excludes the financial supervision system overhaul, it has become difficult for the People Power Party to simply oppose the government organization law revision. The ruling and opposition floor leaders are scheduled to meet before the plenary session in the afternoon under the chairmanship of National Assembly Speaker Woo Won-sik to discuss handling the revision bill.