[2024 National Audit] Lee Bok-hyun "There Was Agreement Within the Economic Team on Resuming Short Selling"

National Assembly Political Affairs Committee Financial Supervisory Service Audit
Lee Bok-hyun Criticizes "No Prior Communication" Statement

Lee Bok-hyun, Governor of the Financial Supervisory Service, is responding to a lawmaker's question during the National Assembly's Political Affairs Committee's audit of the Financial Supervisory Service held on the 17th. Photo by Kim Hyun-min

Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), on the 17th, explained regarding criticisms that he overstepped his authority in comments about the resumption of short selling and other financial policies, stating, "It was a matter agreed upon or shared within the economic team."

Governor Lee made these remarks during the morning session of the National Assembly's Political Affairs Committee audit, responding to People Power Party lawmaker Kwon Seong-dong's criticism that "there were comments about resuming short selling in June, which led to the Presidential Office and the Financial Services Commission (FSC) trying to manage the situation."

Governor Lee explained, "There are overseas investors who hold the view that while illegal short selling is detected, bans on short selling are announced, and electronic systems are created, there should also be people within the authorities who believe that short selling could be resumed at some point." He added, "At that time, there was an opinion that it was appropriate for me, as the FSS Governor, to speak about the possibility of resumption."

Meanwhile, regarding the merger and acquisition (M&A) of an insurance company by Woori Financial Group and the statement that 'there was no prior communication,' in response to the question, "It was said that there was no communication between the FSS and the insurance company acquisition. Why should there be prior communication?" Governor Lee said, "There are limits to the role and methods of the authorities if we only talk about it through post-facto inspections."

Lawmaker Kwon's criticism targeted Governor Lee's statement last month in front of reporters that "there was no prior communication with the Financial Services Commission or the FSS regarding Woori Financial's insurance company acquisition." Concerns were raised that Governor Lee's remarks could lead to misunderstandings that financial authorities interfere with the management decisions of financial companies.

Governor Lee explained, "Woori Financial is different from a raid; we conduct inspections and discuss the results, but regarding the asset management policies of major banks or financial institutions, there is a reality where we inevitably have to communicate through meetings or messages about what we intend to review going forward."