[Inside Chodong]Prosecutor Out, Lawyer In... Expectations for the New Governor of the Financial Supervisory Service

"You may be curious about what kind of monster has arrived, but I'm just an ordinary person, a little over 60 years old."

Last week, immediately after taking office, Lee Chanjin, the new Governor of the Financial Supervisory Service, visited the press room and described himself as "not at all a surprisingly radical person" and "someone who is used to expressing opinions after going through a process of discussion and reaching consensus." His remarks were clearly conscious of the market's concerns, fueled by various labels attached to him such as "the President's close friend" and "a reform-minded figure from People’s Solidarity for Participatory Democracy and the Lawyers for a Democratic Society."

There are several reasons why, after the announcement of the new financial leadership?an office that had been vacant for months?more attention is being paid to the new Governor of the Financial Supervisory Service, who holds a vice-ministerial rank, than to the new Chairman of the Financial Services Commission, who is of ministerial rank and heads the higher authority.

From the perspective of market participants, the influence of the Governor of the Financial Supervisory Service, who holds the authority for supervision, inspection, and sanctions, is inevitably seen as more immediate and direct than that of the Chairman of the Financial Services Commission, who focuses on legal and institutional design. On the same day, Lee Eogwon, the nominee for Chairman of the Financial Services Commission and the first financial chief of the Lee Jaemyung administration, was described as a "stable choice" from a traditional bureaucratic background, but he still faces a confirmation hearing.

Above all, the shadow of the previous Governor of the Financial Supervisory Service looms large. The market has already experienced, over the past three years, what can only be described as "unrestrained financial supervision" driven by the determination of a former prosecutor. Lee Bokhyeon, the previous Governor and a former prosecutor known as "Yoon’s man," was praised for his drive in work, but his actions, which sometimes extended beyond the authority of the Financial Services Commission and even the Ministry of Economy and Finance, led to ongoing controversies throughout his term about being the "real power financial deputy prime minister" and "government-controlled finance."

Now, with the new administration appointing yet another "close confidant of the President, a real power figure," and "a former legal professional" as Governor, the market's concerns are understandable. Governor Lee was a surprise appointment, not even mentioned on the list of potential candidates for the role. Unlike in the capital markets sector, he is also seen as lacking a clear track record in the financial sector, which is considered a weakness.

Now, the market's attention is focused on how the "Lee Chanjin administration" at the Financial Supervisory Service will differentiate itself from the previous "Lee Bokhyeon administration." Having begun his work, the new Governor is emphasizing communication and discussion in his public statements, making a visible effort to listen and remain humble. This is a positive sign, as it demonstrates through action a commitment not to cause sudden instability in the market.

However, there are still many challenges to address amid ongoing uncertainty regarding organizational restructuring. Since the leadership vacuum lasted longer than expected, it is essential to present a more concrete and clear direction for supervision to immediately ease market concerns. The messages to be delivered at the industry-specific meetings scheduled to begin in earnest at the end of this month are expected to serve as a barometer.

Above all, it is crucial not to forget that both "financial system stability" and "financial consumer protection" are the responsibilities of the Financial Supervisory Service, and neither should be neglected or overly prioritized. Rather than acting as an "arbiter" wielding a sword above the market, we hope to see the Financial Supervisory Service fulfill its role as a "service-oriented supervisor" (Financial Supervisory Service), upholding principles and standards based on the trust of market participants.