Deputy Director Appointment Delay Amid Cheong Tensions Sparks 'Alertness'
[Asia Economy Reporter Kim Hyo-jin] As the appointment of the Financial Supervisory Service (FSS) Deputy Governor is delayed, various interpretations and speculations surrounding FSS Governor Yoon Seok-heon's position continue to emerge. Controversies over high-intensity sanctions against financial company executives and legal disputes, as well as criticisms of supervisory negligence, have intertwined, leading to renewed rumors of Governor Yoon's replacement with about one year left in his term.
According to financial authorities and the financial sector on the 1st, the Financial Services Commission (FSC) is reportedly still deliberating without finalizing the direction for handling the FSS Deputy Governor appointment plan. Although there were expectations that the agenda would be processed at the FSC regular meeting on the 27th of last month, it was not tabled.
Considering that the FSC's next regular meeting is scheduled for the 10th, it is estimated that the personnel action will not take place for at least about ten days. Regarding this, an FSC official said, "While it is in principle possible to hold an extraordinary meeting at a date other than the scheduled one to handle the agenda," he added, "there is currently no indication regarding the direction or timing of the decision."
The replacements include Chief Deputy Governor Yoo Kwang-yeol, Deputy Governor Kwon In-won in charge of banking and small finance, and Deputy Governor Won Seung-yeon responsible for capital markets and accounting. All three deputy governors except Deputy Governor Kim Eun-kyung (Director of the Financial Consumer Protection Department), who was appointed in March, will be replaced. Chief Deputy Governor Yoo and others have already submitted their resignations around early last month and are preparing for handover.
The appointment of FSS Deputy Governors is made by the FSC upon the recommendation of the FSS Governor, following verification by the Blue House and others. A financial sector official said, "I understand there are significant differences of opinion between the Blue House and within the FSC regarding the personnel plan submitted by Governor Yoon."
The official also said, "If the personnel changes are implemented, it will mean a new control tower is established under Governor Yoon's administration," adding, "Despite internal work gaps at the FSS, the delay in the process suggests that the Blue House and the FSC may have somewhat different views on Governor Yoon's administration."
Meanwhile, it has been reported that the Blue House's Office of Civil Affairs recently conducted a confidential face-to-face investigation of Governor Yoon, and it is believed that the decision to replace him has been made, effectively halting procedures such as the Deputy Governor appointments.
The Blue House questioned Governor Yoon about the FSS's imposition of heavy sanctions (such as disciplinary warnings) on related financial companies and executives in connection with the overseas interest rate-linked derivative-linked fund (DLF) incomplete sales and massive loss incident, and whether the FSS had failed in its supervisory duties. The Blue House had previously conducted an audit in March regarding the appropriateness of the heavy sanctions related to the DLF.
Since his inauguration in 2018, Governor Yoon has pursued the revival of comprehensive inspections of financial companies and dispute mediation related to the KIKO (Knock-In Knock-Out) incident based on the principle of "financial consumer protection." He is also evaluated as having consistently taken a confrontational stance through policies that maximize financial companies' responsibility for consumer protection, such as strengthening internal control functions.
There are also voices expressing doubts about the current atmosphere surrounding Governor Yoon. Another financial sector official said, "Strengthening consumer protection and financial companies' responsibilities reflects the Moon Jae-in administration's national policy philosophy, and there are inevitable aspects of trial and error or noise revealed in the process of implementing this," adding, "From the perspective of Governor Yoon or the FSS, it must be very frustrating."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
