FSS chief focuses on legacy

The new Financial Supervisory Service governor Zhin Woong-seob is a man of few words, but one thing is certain ― he will be poles apart from his predecessor Choi Soo-hyun.

Not only will he restructure the entire organization, but also ease most of the regulations implemented by the former governor, as stated by Zhin himself and those close to him.

“There have been increasing demands for the FSS to distance itself from the conventional high-handed stance of supervisory authorities,” Zhin said at a board meeting early this week.

“Financial authorities should respect the autonomy and creativity (of financial companies), instead of interfering in all matters.”

The new governor effectively said that he would wipe away all vestiges of his predecessor Choi, who was mostly criticized for his hardline leadership in the organization and an iron-fisted regulatory approach.

In May this year, the FSS had announced it would be carrying out unprecedented mass sanctions on over 200 high-ranking financial company officials ― although this could not be fulfilled.

Only some of the key protagonists, including KB Financial Group chairman Lim Young-rok and KB Kookmin Bank president Lee Kun-ho, stepped down from their post.

Choi had said in his farewell speech that such a conflict was inevitable.

Zhin, on the other hand, has called for the FSS to remain more composed while communicating with the financial industry when it is struggling with internal problems. 

Considering such differences, it seems only rational for Zhin to shake up the entire organization, possibly by replacing most of the executive members.

Several of the vice governor-level officials are also expected to step down as they are older than the 55-year-old Zhin.

The 12-member board submitted their resignation en masse earlier this week, and it is up to the governor to decide on the resignations to accept.

Despite the drastic changes he is promising, Zhin himself is said to be a mild-mannered pacifist.

“He kept good and steady control over the organization, even amid the disputes concerning the merger with Korea Development Bank,” said an official of the Korea Finance Corp. where Zhin has been serving as CEO until recently.

The state-run KoFC will be merged with KDB and launch as a new integrated organization in January 2015.

Zhin’s experience in various government organizations, including the Financial Services Commission, will also be helpful, according to industry watchers.

But for the same reason, some expressed concerns on the independence of the FSS as a supervisory body.

“Under the current system, in which the FSC and FSS remain divided, it is inevitable that the FSS may conflict with the FSC in order to perform its role,” said Kim Dong-won, professor of economics at Korea University.

Zhin worked in the Finance Ministry in 1997-2004 and sporadically in the FSC between 2004 to 2014, before he became KoFC chief.

By Bae Hyun-jung (tellme@heraldcorp.com)