[Kim Byunghwan 3 Months]① "Policy Is Ours" Clearer Financial Services Commission, Role Restoration

Chairman Kim Byunghwan's 3-Month Tenure
Praised for Combining Drive, Clarity, and Detail
Shift in Financial Policy Leadership... Taking the Front to Manage Turmoil

Financial Services Commission Chairman Kim Byung-hwan is responding to lawmakers' questions during the comprehensive audit of the Financial Services Commission and the Financial Supervisory Service at the Political Affairs Committee meeting held at the National Assembly on the 24th. Photo by Kim Hyun-min

Kim Byung-hwan, Chairman of the Financial Services Commission (FSC), will mark his 3-month anniversary in office on the 31st. Since his appointment, the FSC's stance on various issues has become clearer. While his predecessor, Chairman Kim Joo-hyun, had a cautious style akin to "knocking on a stone bridge before crossing," Kim Byung-hwan adopts a principled approach of "if it is the right direction, it should be done."

Previously, although the Financial Supervisory Service (FSS) is an agency under the FSC, Lee Bok-hyun, the powerful head of the FSS aligned with the administration, often voiced strong opinions on issues and current affairs, causing controversies over 'overstepping authority.' However, since Kim's appointment, the situation is being normalized.

Restoring the Distinct Roles of FSC and FSS: "Policy is the FSC's Domain"

A recent example symbolizing the restoration of FSC leadership is the directive to investigate Shinhan Financial Investment's loss of approximately 130 billion KRW during on-floor futures trading, followed by the FSS's prompt on-site investigation. At a senior management meeting on the 14th, Chairman Kim expressed concern over ongoing financial accidents such as embezzlement and fraudulent loans in the financial sector, stating, "A large-scale loss occurred at Shinhan Financial Investment. The FSS should thoroughly investigate this incident and take necessary measures based on the results."

Following Kim's remarks, the FSS immediately launched an on-site investigation. Subsequently, the FSS expanded its inspection scope to 26 securities firms and asset management companies to comprehensively review the status of derivative products. This swift response by the FSS to the FSC chairman's directive is seen as a sign that the FSC is regaining leadership over policy direction.

Another example is the FSC stepping forward to resolve confusion between the FSC and FSS regarding household loan management. When Lee Bok-hyun, head of the FSS, made remarks that seemed to interfere with banks' loan interest rates, causing market confusion, Chairman Kim held an unscheduled press briefing to clarify the FSC's position and calm the situation. He reaffirmed the government's stance to manage household debt within the country's GDP growth rate while emphasizing that banks' 'autonomous management' is the principle. The market confusion was resolved following the briefing.

This restoration of roles is also evident in Chairman Kim's statements. A comprehensive review by Asia Economy of Kim Byung-hwan's official remarks, including his inaugural speech and press releases, found that he mentioned 'policy' 33 times but 'supervision' only 5 times. This clearly highlights the FSC's identity as the 'financial policy' authority and distinctly delineates the roles: 'FSC for policy, FSS for supervision.'

Changed Atmosphere at FSC, Increased Policy Workload: "Clearer Direction"

Under Chairman Kim's leadership, a change in atmosphere is also being felt within the FSC. Internally, while the workload has somewhat increased since his appointment, there is positive feedback that policy transparency has improved and the direction is much clearer than before.

The financial sector relay meetings, held eight times targeting banks, insurance companies, savings banks, and securities firms, are internally focused on finding ideas to resolve current issues and discovering new policies within each responsible department.

Chairman Kim is directly involved even in the details of policies and pays close attention to the preparation and release of press materials. In particular, he has increased the number of Q&A sessions to enhance public understanding of financial policies, emphasizing communication. The FSC is improving communication methods to make explanations of financial policies easier to understand, especially for parts that may be lacking or complex. An FSC official explained, "In various internal meetings, the importance of preventing distortion related to policies and delivering accurate information to ensure the stability of financial policies is being emphasized."