With the launch of the Lee Jae-myung administration, interest in who will take over as head of financial authorities and chief executive officers (CEOs) of policy finance institutions is growing in the financial sector. However, the appointment of the head of the financial authorities is likely to be delayed in government personnel changes due to the restructuring of the financial authorities.
On the 12th, Financial Supervisory Service (FSS) Director Lee Bok-hyun and Industrial Bank of Korea (IBK) Chair Kang Seok-hoon both completed their terms on the 6th, while Export-Import Bank of Korea President Yoon Hee-sung will complete his term on the 26th of next month. Although Kim Byeong-hwan, the chair of the Financial Services Commission (FSC), who took office in July of last year, has about two years remaining in his term, there are growing expectations for his replacement. Former Deputy Chair Kim So-young, the second-in-command at the FSC, also completed her term on the 16th of last month.
Candidates for the next chairperson of the Financial Services Commission include former Korea Exchange Chairman Son Byeong-du (38th batch of the Administrative Exam) and former FSC Deputy Chair Do Gyu-sang (39th batch of the Administrative Exam). Former Deputy Chair Do has attracted attention after joining President Lee's think tank, 'Growth and Integration.'
Among non-bureaucrats, Democratic Party of Korea Supreme Council member Hong Seong-guk, former Democratic Party lawmaker Kim Byeong-wook, and Professor Ha Jun-kyung of Hanyang University’s Department of Economics are mentioned. Considering that 9 out of the last 10 FSC chairpersons have been from the bureaucracy, it is expected that the next chairperson will also likely be a current or former bureaucrat.
A source from the bureaucracy noted, "There was a financial chairperson from the private sector during the Lee Myung-bak administration, but the evaluations, both internal and external, were not favorable," adding, "It seems that since then, it has become customary to appoint a bureaucrat as the chairperson of the Financial Services Commission."
Within the ruling party, opinions suggest that the appointment of the chairperson of the Financial Services Commission will be a lower priority due to the relatively less urgency for a replacement compared to other ministers. It is also said that there is not much aversion within the ruling party towards the current Chair Kim. A source from the ruling party stated, "There are candidates being recommended, but I understand it's not yet at the verification stage."
The appointment of the deputy chairperson of the Financial Services Commission is also a matter of interest. If a bureaucrat takes over as chairperson, a private expert with a good understanding of the current government's policies may be appointed as deputy chairperson. Another source from the financial sector remarked, "It is possible for someone who aligns well with the current government's financial policy direction to come in for the deputy chair position, which does not require a confirmation hearing."
The director of the Financial Supervisory Service is also a major personnel change. Democratic Party members, including Supreme Council member Hong and former lawmaker Kim, are being discussed. Current and former FSS executives, as well as Kim Eun-kyung, who served as the first head of the Financial Consumer Protection Agency under the Moon Jae-in administration, are also on the list. There are speculations that if the Lee Jae-myung administration separates and elevates the Financial Consumer Protection Agency to the newly established Financial Consumer Protection Agency, Kim could serve as the first director. It is reported that there is a rivalry between Democratic Party members and external candidates regarding the appointment of the head of financial authorities within the ruling party.
The results of the appointment of the chairperson of the Financial Services Commission are expected to influence personnel changes at policy finance institutions. The chair of the Industrial Bank of Korea is appointed by the president upon the recommendation of the chairperson of the Financial Services Commission, so for the time being, the acting system led by Kim Bok-kyu, the managing director, is expected to continue.
In the case of the Export-Import Bank of Korea, President Yoon Hee-sung will complete his term next month, so it is expected that a leadership change will occur along with the Industrial Bank of Korea. Kim Seong-tae, president of the Industrial Bank of Korea, will complete his term on January 2 next year. There has been no precedent for the president of the Industrial Bank to depart mid-term due to changes in government, so it is widely expected that he will complete his term.
Among the heads of the four major financial holding companies, Shinhan Financial Group Chairman Jin Ok-dong and Woori Financial Group Chairman Yim Jong-ryong face term expirations in March next year. KB Financial Group Chairman Yang Jong-hee will end his term in November next year, while Hana Financial Group Chairman Ham Young-joo confirmed a three-year reappointment earlier this year.
In the financial sector, it is reported that financial holding companies are strengthening internal controls and transparency regarding the CEO selection process and candidate development, significantly reducing the likelihood of external parachute appointments. After the launch of the Yoon Seok-yeol administration, the chairpersons of KB, Shinhan, and Hana Financial Group were replaced under pressure from the financial authorities, but all were from within the organizations.
In the financial sector, attention is focused on whether Chairman Yim Jong-ryong will be reappointed. Given the parachute controversy during the Yoon Seok-yeol administration, there are speculations that reappointment may be difficult under the Lee Jae-myung administration.
A source from the financial sector stated, "Chairman Yim had friction with the financial authorities of the Yoon Seok-yeol administration, but he still carries the label of 'parachute'" and added, "The fact that the governance structure is weaker compared to other financial holding companies is also a problem."