The government has again put off designating the Financial Supervisory Service as a public institution this year, saying the aim is to ensure the autonomy of financial supervision. Instead, the government plans to strengthen management oversight of the FSS to "at or above the level of public institutions," by expanding disclosure items and releasing details of the governor's business expenses.
Koo Yun-cheol, Deputy Prime Minister for the Economy and Minister of Economy and Finance, convened the Public Institutions Steering Committee on the 29th and reviewed and approved the "2026 plan for designating public institutions," which includes these measures.
Debate over designating the FSS as a public institution intensified in 2017 after questions arose about fairness in internal hiring and lax management. At the time, the government deferred the decision, demanding the introduction of management disclosure and evaluation systems equivalent to those of public institutions and streamlining of the organization.
More recently, during discussions on reorganizing financial authorities, concern has grown that external checks are insufficient relative to the powers exercised by the FSS, pushing the debate over reassignment back to the surface. The National Assembly has also questioned whether oversight by the Financial Services Commission is functioning effectively, citing issues such as the FSS's non-disclosure of business expenses.
Deputy Prime Minister Koo said, "The FSS has met the requirements for designation as a public institution, but has not been designated on grounds of autonomy in financial supervision," adding, "As its authority has expanded, external criticism continues over the propriety of how that authority is exercised and over opaque management, fueling calls that 'democratic controls commensurate with its authority must be implemented.'"
However, Koo said, "If designated as a public institution, the overall public interest and transparency of operations and work could improve, but there are concerns that overlap with the current oversight system centered on the competent ministry could create inefficiencies that risk undermining autonomy and expertise." He added, "We will pursue practical measures to enhance public interest and transparency, rather than designation as a public institution."
The government plans to specify that within this year the FSS must consult with the Financial Services Commission, its competent ministry, when implementing staffing adjustments and organizational restructuring. It will also add detailed governor business expenses and ESG (environmental, social and governance) items to management disclosures via ALIO. Rules related to employee welfare will also be expanded.
Financial supervision will shift from ex post sanctions to a "pre-consulting" inspection approach. Deputy Prime Minister Koo said, "We will promptly prepare and implement reforms to strengthen the transparency and fairness of financial supervision, including inspections, licensing and sanctions."
Based on the Financial Services Commission's management evaluation, the Public Institutions Steering Committee plans to reexamine in 2027 whether to designate the FSS as a public institution.