FSS staff favor merger with FSCWith the country’s financial regulatory system expected to undergo reform, officials at the Financial Supervisory Service (FSS) are expressing concerns that their role might diminish depending on the direction of the reorganization.
On Monday, an emergency committee set up by FSS officials released a statement urging that the FSS merge with the Financial Services Commission (FSC), the top financial regulator, to avoid overlapping work and boost efficiency in pushing forward with financial policy and regulation responsibilities. The statement was supported by 94 percent of FSS employees who voted on the statement.
“It is the first time we have come up with an official position on the issue involving reform in the financial regulatory system,” said an official from the emergency committee. “There have been comments made on this issue by the FSS governor and some executive officials, but the statement contains the opinions of all FSS employees, which is meaningful.”
Both the FSC and FSS are financial regulators. The FSC consists of government officials whose role is to determine financial policies and rules, while the FSS consists of private sector officials who handle inspections and supervision related to those policies. Though the FSC controls the FSS in terms of personnel appointments and assigning duties, the relationship between the public and private bodies is reportedly at odds over their authority and the financial matters being handled.
“Ahead of the financial regulatory system reform, the FSC and FSS should merge,” the statement said. “Another option would be to clearly apportion the authority of the FSS and the FSC.”
The statement was released amid reports the FSC will most likely split the FSS into two organizations to reinforce duties relating to consumer protection.
According to industry sources, the FSC has submitted a revised proposal to reform the country’s financial monitoring system to the Blue House last week. The proposal reportedly splits the FSS into two by having the Financial Consumer Protection Agency managed by the FSS independently. The separate consumer protection body will also take up the FSS role of monitoring financial institutions, according to sources.
The revised proposal comes after a task force under the FSC in charge of coming up with reform measures in the financial regulatory system submitted a proposal to the Blue House, but President Park Geun-hye reportedly instructed the top regulator to include more measures that involve consumer protection.
The FSC, however, has said it is too early to confirm the direction of the reform.
“Based on what the task force has come up with, we also plan to lend an ear to what consumer agencies and experts think about the direction of the reform and come up with a plan that best reflects financial consumers’ needs,” said an FSC official. “We are reviewing various reform measures and no details have been confirmed as yet.”
BY LEE EUN-JOO [firstname.lastname@example.org]