The Democratic Party of Korea has begun to 'split' the Financial Services Commission, following the Ministry of Economy and Finance. They have pointed out the problem of the Financial Services Commission holding both financial policy-making and supervision authority, discussing as an alternative the possibility of transferring policy functions to the Ministry of Economy and Finance and supervision functions to a newly established supervisory body. Essentially, this means the Financial Services Commission is on a path to dissolution, while the FSS will be divided into two.
Members of the Democratic Party of Korea, part of the National Assembly's Political Affairs Committee, held a 'roundtable discussion on financial supervision reform' on 1st.
Professor Ko Dong-won of Sungkyunkwan University, who presented on 'challenges in reforming the financial supervision system,' suggested transferring the financial policy functions of the Financial Services Commission to the Ministry of Economy and Finance, and separating financial supervision functions into 'Financial Soundness Supervision Agency (tentative name)' and 'Financial Market Supervision Agency (tentative name).' The proposed Financial Soundness Supervision Agency would be responsible for supervising the licensing and soundness of financial institutions, while the Financial Market Supervision Agency would regulate financial institutions' business practices and protect financial consumers, which he stated is more efficient.
Professor Ko also proposed establishing a 'Financial Stability Council' for enhancing financial stability. This would involve expanding the current 'F4' meeting, which includes the Minister of Economy and Finance, the Chairman of the Financial Services Commission, the Governor of the FSS, and the Bank of Korea, into an 'F9' meeting. The F9 meeting would consist of the Ministry of Economy and Finance, the Financial Soundness Supervision Agency (tentative name), the Financial Market Supervision Agency (tentative name), the Bank of Korea, the president of the Korea Deposit Insurance Corporation, and four private sector experts.
Park Ji-woong, the deputy head of the Democratic Research Institute, noted during the discussion that 'separating financial policy functions from financial supervision functions and establishing a dual-structure supervisory body is an essential task,' adding that 'it is urgent to form a government-level financial supervision structural reform task force following the new government's inauguration, and that precise institutional design and a step-by-step implementation roadmap are necessary.'
Hwang Se-woon, a senior researcher at the Capital Market Research Institute, stated that 'the feature of the dual-structure financial supervision system is that it reduces regulatory conflicts and enables specialized supervision,' adding that 'it can also focus on protecting consumer rights.'