'Financial Services Commission and Deep Ties' Rep. Kwon Seong-dong, Deliberately Unleashes Harsh Criticism on Financial Supervisory Service's Overreach

Former Chairman Choi Jong-gu and hometown junior
Im Jong-ryong worked together at Blue House during Ministry of Economy and Finance tenure
Kwon Seong-dong, despite being a former prosecutor, has high understanding of economic policy
Attention drawn to Financial Supervisory Service chief's 'abuse of authority' criticism at National Assembly audit

Im Jong-ryong, Chairman of Woori Financial Group (former Financial Services Commission Chairman), Choi Jong-gu, former Financial Services Commission Chairman, Kwon Seong-dong, member of the People Power Party

Rep. Kwon Seong-dong of the People Power Party drew attention by pointing out the controversial overreach remarks made by Lee Bok-hyun, the Financial Supervisory Service (FSS) chief, during the National Assembly's Political Affairs Committee audit. As concerns about the division of roles between the Financial Services Commission (FSC) and the FSS continued to surface, a standing committee member of the National Assembly directly addressed the issue. This action is interpreted as being influenced by Kwon's close ties with the FSC.

Former FSC Chairman Choi Jong-gu and Rep. Kwon are both from Gangneung, Gangwon Province. They are alumni of Gyeongpo Middle School, born in 1955 (officially registered as 1957) and 1960, respectively. After graduating from Gyeongpo Middle School, Choi attended Gangneung High School, while Kwon transferred to Myeongryun High School. It is known that Kwon's move to Myeongryun High was significantly influenced by his father, who was a teacher at Myeongryun High and chairman of the Myeongryun Academy.

Both later went on to attend university in Seoul. Notably, their relationship grew closer during the April 15, 2020 general election. At that time, Kwon left the United Future Party and ran as an independent, and it is said that former Chairman Choi supported him wholeheartedly, strengthening their bond.

Im Jong-ryong, chairman of Woori Financial Group, also has ties with Rep. Kwon. Chairman Im is a former Ministry of Strategy and Finance official who served as FSC chairman during the Park Geun-hye administration. In January 2009, when Im was the Planning and Coordination Office chief at the Ministry of Strategy and Finance, he was appointed as the Blue House economic and financial secretary. Rep. Kwon often crossed paths with Chairman Im during committee activities.

Because of this, despite being a former prosecutor, Rep. Kwon is regarded as well-versed in the organizational logic and policies of economic ministries such as the Ministry of Strategy and Finance and the FSC. Kwon has served not only as chairman of the Legislation and Judiciary Committee but also on the Planning and Finance Committee and the Political Affairs Committee. His connections with economic bureaucrats and standing committee members have continued. Thanks to this background, he was able to appropriately point out key issues and controversies surrounding financial authorities during this year's Political Affairs Committee audit.

A representative example is Rep. Kwon's sharp criticism of FSS Chief Lee Bok-hyun's overreach remarks. On the 17th during the audit, Rep. Kwon told Lee, "The FSS is a subordinate organization of the FSC and only handles inspections and supervisory duties delegated by the FSC. The FSS chief speaks too frequently on financial policy." This directly addressed criticism from inside and outside the financial authorities about the FSS chief causing confusion by leading past financial policy statements.

Im Jong-ryong, Chairman of Woori Financial Group, is attending a business agreement ceremony to support small and medium-sized enterprises in responding to the climate crisis, held at the Bankers' Hall in Jung-gu, Seoul, on the afternoon of September 24. 2024.9.24 [Joint Coverage] Yonhap News Agency

Rep. Kwon's remarks regarding Woori Financial Group's acquisition of an insurance company also attracted attention. He said, "(Earlier, the FSS chief) said there was no communication with the FSS regarding Woori Financial's insurance company M&A. Why would there be communication beforehand?" He added, "Although it is called administrative guidance, administrative guidance and abuse of power are on the borderline."

This was a rebuttal to the FSS chief's statement last month in front of reporters that there was "no prior communication with the FSC or FSS" regarding Woori Financial's insurance company acquisition. Concerns arose that Lee's remarks could lead to misunderstandings that financial authorities interfere with corporate management decisions.

A financial industry insider said, "Communication before approval review regarding a financial group's insurance company acquisition is shadow regulation," adding, "There was controversy because the FSS chief directly acknowledged the existence of shadow regulation, which the Park Geun-hye administration tried to eliminate during financial reforms." Since Rep. Kwon, a former prosecutor and ruling party member, criticized the division of roles between the FSC and FSS during the audit, it is expected that related controversies will not arise in the future.

Meanwhile, the FSC and FSS are scheduled for a comprehensive Political Affairs Committee audit on the 24th. The session will broadly cover issues under the committee's jurisdiction, including not only financial authorities but also all financial institutions.