No need to be recklessThe Financial Supervisory Service (FSS) is being questioned over its neutrality when conducting investigations. It has embarked on a probe into the management at KEB Hana Bank and its parent Hana Financial Group ahead of a routine inspection — and only one month after it finished an investigation into the bank’s recruiting practices. Some suspect the government’s financial watchdog may be mounting pressure after the financial group defied the government’s opposition and kept Chairman Kim Jung-tai in office for a third term despite allegations about him being connected to former President Park Geun-hye’s friend Choi Soon-sil. The FSS claims the inspection is just a part of a routine procedure and denied any other motive.
The FSS has invited suspicion because of its questionable and unreliable activity. Under the one-year-old administration, it is already on its third chief. It suffers from a moral problem over its own recruitment irregularities and insider cryptocurrency trading. The watchdog is handling multiple major issues at the same time — alleged accounting fraud at Samsung BioLogics, the fallout from the fat-finger error at Samsung Securities, a probe into irregular hiring at financial institutions and overall reforms in the financial sector. But few have much confidence in its ability. It drew scorn from the deputy prime minister in charge of economic affairs as well as the Financial Services Commission chair for leaking information about its probe into Samsung BioLogics before a final review.
FSS’s new chief Yoon Suk-heun admitted that it failed to uphold its independent role amidst external pressure and an internal identity crisis. He vowed to restore dignity and confidence. A financial regulator must have independence and credibility to watch over the financial sector. But its powers must not be used recklessly. It cannot secure faith and respect from the financial sector if it is suspected of taming chaebol and bullying to increase its pride.
JoongAng Ilbo, May 14, Page 30