President Suspended from Duty, Personnel Appointment Impossible
Financial Supervisory Service Chief's Term Ends Early June
If Successor Not Appointed, Deputy Chief Will Act as Interim Head
Lee Bok-hyun, the Governor of the Financial Supervisory Service (FSS), will retire after completing his term in June this year, even if a successor is not appointed. According to current law, once Governor Lee's term ends, the Senior Deputy Governor is expected to act as the interim head of the FSS.
According to Article 29 of the Financial Services Commission Act (Act on the Establishment, etc. of the Financial Services Commission) on the 2nd, the FSS Governor is appointed by the President upon the recommendation of the Financial Services Commission Chairman, following a resolution by the Commission. The Governor's term is three years, and when the term expires, the Deputy Governor acts on behalf of the Governor.
Initially, the industry predicted the possibility of Governor Lee’s reappointment. He is well-known for having worked alongside President Yoon Seok-yeol on investigations such as the 2006 Hyundai Motor slush fund case, the low-price sale of Korea Exchange Bank to Lone Star, the 2013 National Intelligence Service online comment manipulation case, and the 2016-2017 special prosecution of the political scandal.
However, with President Yoon declaring an unprecedented state of emergency and being suspended from duty by a parliamentary impeachment resolution, the prevailing view is that the possibility of reappointment has disappeared. Whether the political turmoil prolongs or is resolved quickly, the consensus is that reappointment of the FSS Governor is impossible because the President’s suspension prevents any reappointment decisions.
If Governor Lee retires in early June, Senior Deputy Governor Lee Se-hoon is expected to act as the interim Governor. Article 30 of the Financial Services Commission Act stipulates that the Deputy Governor acts on behalf of the Governor in the order prescribed by the FSS’s bylaws.
Governor Lee is expected to tighten control over operations during the remaining six months. On the 10th of last month, he replaced 74 out of 75 department heads. Only the Director of the Financial Market Stability Bureau retained their position. Considering that the director monitoring market conditions amid the state of emergency cannot be replaced, this effectively means a complete overhaul of department heads.
After announcing the personnel changes, Governor Lee told reporters, "Crisis management will be necessary for the next six months, so I took responsibility and made these personnel decisions. This is not the time to hesitate or think about preserving positions."
A senior official at the FSS stated, "Despite the chaotic situation, the FSS is preparing this year’s work plans without disruption, including real estate project financing (PF), household debt, and supervision directions for financial companies. Governor Lee’s leadership could actually be advantageous for market stability and overcoming difficulties during this crisis."
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