[1mm Finance Talk] Financial Supervisory Service Employees Head to National Assembly... "We Will Fight to the End"

10th Day of "Black Attire Protest"... "To the National Assembly, Rain or Shine"
Vowing to Fight to the End, Even if the Fast-Track Battle Drags On
Criticism from Experts and Job Seekers... "Undermining Supervisory Independence"

It has now been ten business days since employees of the Financial Supervisory Service began wearing black and holding daily protests against the proposed financial supervisory reform. On the afternoon of the 24th, the day before the National Assembly’s plenary session, around 1,200 employees plan to gather in front of the National Assembly to hold a rally. Not only Financial Supervisory Service employees but also figures from the financial sector, administrative experts, and job seekers have continued to criticize the organizational restructuring, arguing that it will weaken supervisory independence and reduce work efficiency.

On the 18th, members of the Financial Supervisory Service labor union held placards at a rally opposing the separation of the Financial Consumer Protection Agency and the designation of the Financial Supervisory Service as a public institution, held in front of National Assembly Station in Yeouido, Yeongdeungpo-gu, Seoul. Photo by Yonhap News

According to the Emergency Response Committee of the Financial Supervisory Service, approximately 1,200 employees will gather at 6:30 p.m. in front of the National Assembly in Yeouido, Seoul, to continue their protest. Since participating in protests during legal working hours could raise legal issues, the employees have decided to assemble after work, all dressed in black. The rally will proceed as planned, even if it rains as forecasted.

The employees plan to chant slogans as usual, such as “Withdraw the separation of the Financial Consumer Protection Agency,” “Withdraw the designation as a public institution,” and “End government-controlled finance.” Yoon Taewan, chair of the Emergency Response Committee, stated, “At this outdoor rally, we plan to maximize opportunities for ordinary employees to speak freely.”

“We Will Hold Out to the End, Even if It Becomes a Long-Term Fast-Track Battle”

The Emergency Response Committee and employees of the Financial Supervisory Service have vowed to continue their struggle “until the last day of the maximum 330-day period,” after the ruling party decided on the 22nd to designate organizational restructuring bills, such as the Act on the Establishment of the Financial Supervisory Commission (currently the Act on the Establishment of the Financial Services Commission), as fast-track items.

Bills designated as fast-track items must be processed by the plenary session within a maximum of 330 days (180 days in the standing committee, 90 days in the Legislation and Judiciary Committee, and 60 days before being referred to the plenary session). In the plenary session, at least three-fifths of all lawmakers (180 or more) must agree for the bill to pass. The ruling party and government have proposed January 2 of next year as the implementation date for the reform, but if the process is delayed, it will be applied from November 28 of next year.

The Emergency Response Committee has raised the level of protest, saying that even young employees are unsettled enough to consider leaving. Veteran team leaders with over 20 years of experience have responded, “We have no regrets about transferring or changing jobs,” but many younger employees are concerned that if they are assigned to the Financial Consumer Protection Agency, it will be difficult to return to the Financial Supervisory Service. They worry that this could pose a significant burden to their career management.

The amendment to the Act on the Establishment of the Financial Supervisory Commission, proposed by Kim Byungki, floor leader of the Democratic Party of Korea, on the 15th, specifies the authority for “personnel exchange” instead of “dispatch work.” Article 67-3, Paragraph 2 of the amendment stipulates, “If necessary, the Governor of the Financial Supervisory Service and the Head of the Financial Consumer Protection Agency may conduct personnel exchanges between their respective staff.” However, employees of the Financial Supervisory Service argue, “Even if it is called an exchange in form, in reality, returning will not be easy.”

Job Seekers Also Express Discontent Over Designation as a Public Institution

Not only current employees but also job seekers have expressed dissatisfaction with the designation of the Financial Supervisory Service as a public institution. When the ruling party and government announced on the 7th that they would separate the Financial Consumer Protection Bureau from the Financial Supervisory Service and establish the Financial Consumer Protection Agency, job seekers preparing for next year’s public recruitment at the Financial Supervisory Service posted comments in their KakaoTalk chat rooms, saying, “The Financial Consumer Protection Agency is a C-match.” This slang means that becoming a public institution makes it less attractive compared to private financial companies.

This sentiment is also evident in recruitment plans. On August 25, the Financial Supervisory Service announced it would hire 66 new level-5 comprehensive employees next year. The number of recruits by major is as follows: 24 in business administration, 16 in law, 12 in economics, 7 in IT, 4 in statistics, 2 in financial engineering, and only 1 in consumer studies. The fact that only one person is being recruited for consumer studies shows the low demand and popularity of consumer protection organizations.

As even job seekers are turning away from both the Financial Supervisory Service and the Financial Consumer Protection Agency, the Emergency Response Committee plans to continue persuading other labor unions, the Financial Services Commission, and political circles, as well as the media, of the need to revise the practical aspects of the Act on the Establishment of the Financial Supervisory Commission.

Experts Also Criticize “Undermining the Independence of Financial Supervision”

Even financial companies and administrative experts have expressed support for the “black attire protests” by Financial Supervisory Service employees. Financial companies complain, “In the past, we only had to deal with the Financial Services Commission and the Financial Supervisory Service, but now we will have to deal with four organizations: the Ministry of Economy and Finance, the Financial Supervisory Commission, the Financial Supervisory Service, and the Financial Consumer Protection Agency.” They argue that communication and policy reflection will become even more difficult.

Criticism has also continued from academia. According to the ruling party and government’s reform plan, the Financial Supervisory Commission will be responsible for supervising the soundness of financial companies, while the Financial Consumer Protection Agency will be responsible for supervising business conduct. Experts point out that if the organizations are divided in this way, conflicts of interest between financial bureaucratic organizations will intensify, and opposition to the conversion of the Financial Supervisory Service into a public institution will make institutional integration difficult. Ultimately, there are concerns that it will become harder to regulate financial companies independently from politics, potentially weakening the very justification of consumer protection.

Goo Minkyo, a professor at the Graduate School of Public Administration at Seoul National University, stated at a forum hosted by the People Power Party at the National Assembly in Yeouido, Seoul, on the 17th, “This government reorganization is highly likely to increase uncertainty in the Korean economy by simultaneously weakening the independence of financial policy and the stability of fiscal policy. Rather than encouraging healthy competition and coordination among ministries, it will promote inertia and complacency, and the newly established organizations, under the name of ‘control towers,’ will often end up as redundant layers of bureaucracy.”