[1mm Finance Talk] FSS Shaken by Lee Chanjin's Executive Term Guarantee Policy... Concerns Over Personnel Bottlenecks

Personnel Changes Under Previous Governor Were Too Extensive, Prompting a Slower Approach
"Guaranteeing Executive Terms and Limiting Director Promotions Is Excessive," Critics Say

As it was reported that Lee Chanjin, Governor of the Financial Supervisory Service, pledged to guarantee a three-year term for deputy governors and a two-year term for assistant deputy governors, concerns have been raised within the organization about potential personnel bottlenecks. While the decision to keep personnel changes minimal is understandable, given the extensive reshuffling under the previous governor and the recent political pressures during last month's organizational restructuring, some have questioned whether it was necessary for Lee to go as far as to guarantee executive terms.

Lee Chanjin, Governor of the Financial Supervisory Service, is attending the 2025 Political Affairs Committee audit held at the National Assembly on the 21st, responding to questions from lawmakers. Photo by Yonhap News

According to the financial sector on October 31, Governor Lee made remarks at the Financial Supervisory Service executive meeting held on October 29, formalizing a three-year term for deputy governors (including time served as assistant deputy governor) and a two-year term for assistant deputy governors. He also reportedly stated that only directors with at least three years of service would be eligible for executive promotion.

Governor Lee has set a policy to minimize the scale of executive appointments. Previously, at the National Assembly Political Affairs Committee audit on October 21, he stated, "I will make personnel decisions in a way that does not undermine work continuity."

The financial sector believes that Governor Lee's intention to reduce the scale of personnel changes stems from the sweeping reshuffle under the previous governor. Former Governor Lee Bokhyeon replaced 74 out of 75 directors, excluding only the Director of the Financial Market Stability Department, in December last year. In addition, the morale of the organization had declined due to political pressures and the threat of separating and establishing the Financial Consumer Protection Agency, which is also seen as a factor in Lee's decision.

Governor Lee's policy also aligns with the first-grade personnel appointments at the Financial Services Commission conducted on October 29. With Lee Hyeongju, former standing commissioner at the Financial Services Commission, promoted to head of the Financial Intelligence Unit (FIU); Ahn Changuk, former director of the Financial Industry Bureau, promoted to standing commissioner; and Park Minwoo, former director of the Capital Markets Bureau, promoted to standing commissioner of the Securities and Futures Commission, speculation is growing that Lee Sehun, the current Senior Deputy Governor of the Financial Supervisory Service, will remain in his post. Although there were rumors that a Financial Services Commission official would be appointed as his successor, these have now subsided.

According to the financial sector, during the vetting process for assistant deputy governors at the Financial Supervisory Service, the Presidential Office requires consent forms from FSS directors. Although first-grade appointments at the Financial Services Commission have already taken place, there have been no reports that FSS directors have submitted consent forms to the Presidential Office. Typically, it takes about two to three weeks from the time the Presidential Office receives the consent forms to finalize FSS executive appointments. Therefore, even if the Presidential Office receives the forms next week (early next month), the actual appointments are likely to take place between mid and late next month.

Within the Financial Supervisory Service, given that there is no news of a successor to the Senior Deputy Governor coming from the Financial Services Commission and no reports of directors submitting consent forms to the Presidential Office, many believe that the current system under Senior Deputy Governor Lee Sehun is likely to continue.

With the scale of executive retention expected to be larger than anticipated and Governor Lee signaling only minor personnel changes, concerns about personnel bottlenecks are growing among some team leaders and lower-level promotion candidates. Although it is difficult to express dissatisfaction openly after enduring external disruptions from last month's organizational restructuring, some believe that the governor's remarks guaranteeing executive terms were inappropriate. It is pointed out that he should have considered employee morale and motivation.

There are also opinions that the governor should have taken into account the possibility of the Financial Supervisory Service being converted into a public institution. If the FSS is converted into a public institution next year, employees' work autonomy will decrease and regulations will be strengthened. In this context, it is considered inappropriate for the governor to make remarks about guaranteeing terms that could negatively affect organizational morale.

An official from the Financial Supervisory Service said, "While there were expectations that the governor would keep the scale of personnel changes small, many employees are disappointed by the remarks guaranteeing executive terms and limiting executive promotion eligibility to directors with at least three years of service," adding, "There are concerns that this could lead to personnel bottlenecks and weaken promotion motivation, which may negatively affect the organizational atmosphere."