MOEF Responds to Financial Authority Overhaul Review: "New Ministry of Strategy and Finance Remains Economic Control Tower"

"Close Communication with Fiscal and Financial Authorities"
Ruling Party and Government Withdraw Plan to Establish Financial Supervisory Commission

As the government and the ruling party have withdrawn the government reorganization plan to abolish the Financial Services Commission and establish a new Financial Supervisory Commission, the Ministry of Economy and Finance announced its position, stating that "the newly established Ministry of Strategy and Finance will unwaveringly fulfill its role as the economic control tower."

On September 25, immediately after an emergency high-level meeting between the government and the ruling party, the Ministry of Economy and Finance released a statement through its spokesperson, saying, "The newly established Ministry of Strategy and Finance, as a deputy prime ministerial ministry, will strengthen its overall coordination of economic policy," and emphasized, "We will communicate closely with fiscal and financial authorities to restore the livelihood economy and build a super-innovative economy."

Earlier that morning, the Democratic Party, the government, and the presidential office held a closed high-level meeting at the National Assembly to discuss the amendment to the Government Organization Act, ultimately deciding to reconsider the reorganization of financial authorities from scratch. Initially, the government and the ruling party had pushed for a plan to transfer the budget function of the Ministry of Economy and Finance to the Planning and Budget Office under the Prime Minister's Office, transfer the policy function of the Financial Services Commission to the Ministry of Economy and Finance, abolish the Financial Services Commission, and establish a new Financial Supervisory Commission to take over supervisory functions.

However, as concerns were raised that dividing financial policy and supervisory functions among four agencies could reduce work efficiency, and as opposition from working-level officials continued, the reorganization plan was effectively scrapped.

As a result of this decision, the plan to separate the budget function from the Ministry of Economy and Finance and establish a new Planning and Budget Office will be maintained, but the reorganization of financial authorities will be halted. The current system of the Financial Services Commission and the Financial Supervisory Service will remain unchanged, and the plan to separate the Financial Consumer Protection Agency from the Financial Supervisory Service has also been withdrawn. However, the plan to designate the Financial Supervisory Service as a public institution will continue as agreed by the government and the ruling party.

Han Jeongae, chair of the Democratic Party's Policy Committee, told reporters immediately after the meeting, "The government and the ruling party have decided not to include the separation of policy and supervisory functions of the Financial Services Commission and the establishment of the Financial Consumer Protection Agency, which were to be fast-tracked, in this government reorganization plan."

The Ministry of Economy and Finance stated, "When the amendment to the Government Organization Act is finalized in the National Assembly, we will review measures to strengthen the overall coordination of economic policy."