Ten­sion be­tween fi­nan­cial agen­cies es­ca­lat­ing

The Korea Times - - FRONT PAGE - By Jhoo Dong-chan [email protected]­re­atimes.co.kr

A feud be­tween the Fi­nan­cial Ser­vices Com­mis­sion (FSC) and Fi­nan­cial Su­per­vi­sory Ser­vice (FSS) has come to the sur­face, af­ter union mem­bers of the lat­ter is­sued a state­ment Dec. 3 re­quest­ing Pres­i­dent Moon Jae-in dis­man­tle the FSC.

FSC Chair­man Choi Jong-ku and FSS Gover­nor Yoon Suk-heun have con­tin­u­ously said the two agen­cies are in a “co­op­er­a­tive re­la­tion­ship” when­ever signs of dis­cord sur­faced, but the re­cent de­vel­op­ment clearly demon­strates there is an on­go­ing feud be­tween the reg­u­la­tory agen­cies for hege­mony.

This is cre­at­ing a stir be­cause the FSC is re­spon­si­ble for es­tab­lish­ing the gov­ern­ment’s fi­nan­cial poli­cies, and the FSS is tech­ni­cally un­der its con­trol as the agency that im­ple­ments them.

The ten­sion be­tween the two agen­cies has con­tin­ued since the FSC-FSS gov­er­nance sys­tem was in­tro­duced in 2008, but the re­cent de­vel­op­ment will likely in­ten­sify the bad blood be­tween them.

In its state­ment, the FSS union also com­plained about the FSC’s move to down­size the for­mer’s bud­get and work­force, call­ing it ir­ra­tional.

“The FSC is uti­liz­ing its bud­get ap­pro­pri­a­tion right to tame the FSS,” said Lee In-gyu, the head of the union. “Such reck­less ac­tion should be im­me­di­ately dealt with.”

The com­mis­sion has al­legedly de­manded the FSS re­duce its bud­get for 2019 by a huge amount and cut the num­ber of high-rank­ing of­fi­cials there by more than 10 per­cent. The lat­ter’s bud­get for this year was 362.5 bil­lion won ($323.8 mil­lion).

The FSC im­me­di­ately de­nied the al­le­ga­tion.

“Bud­get man­age­ment by the FSS was called into ques­tion by the Board of Au­dit and In­spec­tion,” an FSC of­fi­cial said. “We are just try­ing to make it right.”

Bad feel­ings be­tween the two agen­cies have es­ca­lated since FSS Gover­nor Yoon Suk-heun was ap­pointed in May. Yoon has long claimed his agency should ex­e­cute its role as a fi­nan­cial over­seer in­de­pen­dently.

Since Yoon’s ap­point­ment, the two agen­cies have clashed on var­i­ous fi­nan­cial is­sues, in­clud­ing Sam­sung Se­cu­ri­ties’ “fat finger” scandal and Sam­sung Bi­o­Log­ics’ al­leged ac­count­ing fraud.

Opin­ions are di­vided about the two agen­cies’ roles in pol­i­cy­mak­ing and in­ves­ti­ga­tions.

“Un­der the cur­rent reg­u­la­tory sys­tem, in­spec­tions are sub­or­di­nate to pol­i­cy­mak­ing,” Gyeongsang Na­tional Univer­sity pro­fes­sor Kim Hong-beom told the JoongAng Ilbo, a lo­cal daily. “The fi­nan­cial over­seer’s role should be in­de­pen­dent from a pol­i­cy­mak­ing body.”

FSS Gover­nor Yoon Suk-heun

FSC Chair­man Choi Jong-ku

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