New finance regulators tasked with improving coordination

Financial Services Commission chief nominee Koh Seung-beom, left, and Financial Supervisory Service chief Jeong Eun-bo / Korea Times file

By Kim Yoo-chul

New appointees to run the nation's financial regulators are expected to improve communication and coordination to address outstanding issues and ensure that no pending tasks are left unaddressed, officials said Thursday.

President Moon Jae-in named Koh Seung-beom, a member of the Bank of Korea's monetary policy board, as chief of the Financial Services Commission (FSC), Korea's top financial policy regulator.

And to fill the gap at the top of the Financial Supervisory Service (FSS), the name of Jeong Eun-bo, a former negotiator for South Korea's defense cost-sharing talks with the United States, has been floated by FSC Chairman Eun Sung-soo. The FSS is a public agency that inspects and supervises financial services firms under the supervision of the FSC, a government regulatory authority. The FSS chief is nominated by the FSC chief and approved by President Moon.

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Cheong Wa Dae said it has accepted Eun's voluntary offer of resignation from his post.

The central question is what could be the two chiefs' priorities. Because Cheong Wa Dae and the government are inclined to manage a set of core priorities before President Moon's term ends in May 2022, the two chiefs are expected to look for ways to increase the level of communication, officials said.

"Given Koh's expertise in understanding financial policies during his time with the central bank, the FSC chief is set to facilitate communication with the FSS chief and financial authorities to handle various economic priorities effectively and quite thoroughly," an FSC official said. Koh is subject to pass confirmation hearings by the National Assembly, but as the administration is entering its last lap, officials said it's very unlikely for Koh to be rejected during the confirmation hearings, the dates of which have yet to be set.

A possible conflict of interest between the FSC and FSS is the desire by the FSS to be more independent with its own budget, as the FSC is in charge of its financial policies and supervision. The FSS has been asking the FSC to grant it more independence to supervise and regulate financial markets with a higher budget, claiming the current dual supervisory body system is inefficient in terms of receiving feedback and executing available policy cards.

Plus, a recent private equity fund (PEF) fiasco that involved two asset management companies awakened the FSS's requests for greater autonomy in terms of monitoring the rapidly growing PEF market.

"The two chiefs will not just let outstanding and pending issues go as they will have a greater say for improving public trust," an FSS official said by telephone.

Regarding the specifics of his own priorities as FSS chief, Jeong said, "I feel heavy responsibility because of the continued spread of COVID-19 and its grave impact on the local economy. I will communicate closely with relevant government agencies in a way to address possible risk factors.

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