Heated Mofia Controversy Over the Appointment of the Next Chairman of the Bank Federation

Kim Kwangsoo, NH Nonghyup Financial Chairman, an Expert with Experience in Both Public and Private Sectors...
But Concerns Grow Over Consecutive Appointment of Mofia Officials as Association Chairmen

[Asia Economy Reporter Park Sun-mi] As Kim Kwang-soo, Chairman of NH Nonghyup Financial Group, was elected as the next chairman of the Korea Federation of Banks, voices are growing in the financial sector calling for the creation of a fair and safe financial market, breaking away from the ‘Mofia’ (financial sector dominance by former Ministry of Strategy and Finance officials).

The Korea Federation of Banks announced on the 27th that Chairman Kim was unanimously elected as the 14th chairman of the Federation. The new chairman is scheduled to begin a three-year term starting December 1. Born in 1957, Kim graduated from Gwangju Jeil High School, Seoul National University’s Department of Economics, and the Paris Institute of Political Studies (Sciences Po) with a degree in International Economics. He entered public service by passing the 27th Administrative Examination and has served as Director of Financial Services at the Financial Services Commission and as Director of the Financial Intelligence Unit. Since April 2018, he has been serving as Chairman of Nonghyup Financial Group.

Chairman Kim is evaluated to greatly contribute to the development of the banking industry, which faces internal and external uncertainties such as the prolonged COVID-19 pandemic and digital transformation, based on his extensive experience and outstanding insight into the banking industry.

However, some critics point out that financial associations appear to be dominated by ‘Mofia’ as they support former bureaucrats who act as their shields.

The Financial Justice Solidarity issued a statement regarding Kim’s election as chairman of the Korea Federation of Banks, saying, "Although Nonghyup, involved in the current Optimus scandal, should be undergoing investigation and doing its best to take responsibility for compensation and prevent recurrence, Chairman Kim, the ultimate person responsible, seems to have fled rather than resolving the issue, entering the path of ‘Gwanpia’ (bureaucrat-dominated financial sector)." They strongly condemned the banking sector’s behavior of clinging to positions without regard for the meaning, responsibility, and role of leadership.

They continued, "Financial associations are looking for ‘Mofia’ chairpersons who can shield them from regulatory pressure amid a series of ongoing financial sector crises such as the private equity fund scandal and continuous insurance disputes," and emphasized, "At this point, when predatory acts by financial companies against financial consumers, such as the private equity fund scandal, are relentless, we strongly urge financial companies to reflect, break away from bureaucratic finance, and take the lead in creating a ‘fair and safe financial market.’"

Recently, as all financial associations have been nominating and selecting their next chairpersons, in November, Jung Ji-won, an economic bureaucrat, was elected chairman of the General Insurance Association. Following the election of Kim, an economic bureaucrat, as the new chairman of the Korea Federation of Banks, next month, Jung Hee-soo, a three-term National Assembly member and former chairman of the National Assembly’s Budget and Accounts Committee, currently head of the Insurance Research Institute, is expected to be finally appointed as the new chairman of the Life Insurance Association.