Financial Supervisory Reform Experts Met with Yoon's Team During Presidential Election
Requested System Overhaul but Were Told "Difficult to Reflect in Pledges"
Transition Committee Formed but Practical Feasibility Virtually None
[Asia Economy Reporter Song Seung-seop] During the presidential election campaign, academics and private financial experts strongly demanded a reform of the financial supervisory system, but it appears that the financial supervisory system will not be addressed in the new government's organizational restructuring. Officials related to Yoon Seok-yeol, the People Power Party president-elect, said during the campaign that "restructuring the financial authorities system" was not a priority, and this sentiment has continued in the Presidential Transition Committee formed afterward.
According to the financial sector on the 24th, the "Experts' Group Urging Financial Supervision Reform (Geumgaemo)" conveyed the argument that the financial authorities' system must be changed to major presidential candidates through written and face-to-face communications during the election process. Geumgaemo is a group of 15 scholars in the financial field, and on the 16th of last month, they collected signatures from 312 experts demanding a reform of the financial supervisory system.
Geumgaemo also met with People Power Party camp officials three times to persuade them. Officials from Yoon's camp who met with Geumgaemo responded to the demand for reforming the financial supervisory system by saying, "It is a controversial issue, so it is difficult to reflect it in the pledge," and politely declined. They also stated that the specific composition of government ministries is a matter to be handled by the transition committee.
After the transition committee was formed, there is widespread speculation that the reform of the financial supervisory system has effectively been abandoned. Jeon Seong-in, a professor in the Department of Economics at Hongik University and former co-representative of Geumgaemo, explained, "Considering the members participating in the economic division of the transition committee, I think reforming the financial authorities will be difficult," adding, "There were even some who opposed signing the call for financial supervision reform." Geumgaemo is currently disbanded.
Declining Public Interest and Misalignment with Government Policy Direction
It appears that the financial supervisory system reform plan was not included in the Financial Services Commission's transition committee briefing materials on the 25th. A Financial Services Commission official said, "Reforming the financial supervisory system is a matter to be discussed and decided by the transition committee, not something the Financial Services Commission, as the party involved, should comment on."
There is also an explanation that the demand for financial supervision reform was difficult to accept from the start, as public interest is lower compared to issues like total loan volume regulation or interest rate problems. Yoon Chang-hyun, a People Power Party lawmaker who helped design Yoon Seok-yeol's financial policy, mentioned in an interview with Asia Economy at the end of last month, "Government organizational restructuring is not a major issue," adding, "Since discussions are focusing on overcoming COVID-19 and the active role of finance, dismantling the Financial Services Commission cannot be included in the pledges."
There are also criticisms that transferring the functions of the Financial Services Commission to the Ministry of Economy and Finance does not align with Yoon Seok-yeol's government policy direction, which aims for a 'small government.' There is also the practical issue of needing cooperation from the ruling Democratic Party, which holds the majority, to pass the government organization restructuring plan.
Meanwhile, discussions on restructuring other ministries are relatively active. The transition committee established a government organization restructuring task force (TF) the day before. Shin Yong-hyun, spokesperson for the transition committee, stated regarding Yoon's pledge to abolish the Ministry of Gender Equality and Family, "It would be good to understand that it is still consistently maintained." They are also considering separating the Ministry of Science and Technology from the Ministry of Information and Communication, as well as transferring the trade sector from the Ministry of Industry and Resources to the Ministry of Foreign Affairs.
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