Progressive new FSS chief pledges consumer protection

The new governor of the Financial Supervisory Service in his inauguration speech Monday stressed a need to bolster autonomy as a regulator and enhance consumer protection.

Kim Ki-sik, a new chief regulator of financial institutions who took office Monday, succeeded the role of Choe Heung-sik, who offered to step down on March 12.

Ex-governor Choe‘s resignation came amid growing allegations of irregularities and abuse of power in the process of hiring entry-level employees at Hana Financial Group during his stint in top post in 2013.

Formerly a civic activist and vocal advocate of financial group restructuring, Kim was tapped as the top financial regulator on Friday. Kim was also formerly a lawmaker of the ruling Democratic Party of Korea.

Kim in the inauguration speech said he would move to distinguish FSS’ role as the financial oversight body from that of financial policymaking body, the Financial Services Commission. FSS is under supervision of FSC.

“The principle of financial oversight cannot be subject to distortion due to political influence or cannot become a part of policy decisions,” Kim said.

He added his main focus is to minimize financial consumers‘ vulnerability.

“Criticisms toward the FSS have been all over the place, as FSS prioritized financial companies’ soundness over financial consumer protection,” he said.

“Often, consumers have fallen prey to financial institutions‘ loan products, as the institutions have been committed to what could be seen as an act of plundering.”

Kim also picked consistency in executing oversight on financial firms as the key to redeeming public confidence on the oversight body.

Kim’s speech came immediately after an in-house team of counsels wrapped up a probe on recruitment irregularities of Hana Financial Group that took place in 2013.

Ex-chief of FSS was found to have solicited a free pass of an applicant with personal ties, so that the applicant was accepted in Hana Financial Group’s employment process despite being found ineligible in the screening process.

The case involving the ex-watchdog chief was one of the 32 irregularities in Hana Financial Group in 2013 found during the three-week probe. Half of the cases originated from “recommendations” of those in power, such as politicians, executives of banking groups and a subsidiary banks and bank branch managers, as well as the then-Hana Financial Group CEO Choe.

The FSS has not found clear evidence on whether Hana Financial Group Chairman Kim Jung-tai was involved in the hiring scandal in 2013, said FSS Deputy Gov. Choi Seong-il during a press conference Monday.

While resigning, Choe had denied the allegation of involvement in the hiring scandal.

The special counsel team, led by Choi, has submitted the probe result to prosecutors, meaning the solicitors are subject to criminal charges.

Choi added the FSS‘ special counsel team did not have a plan to target other banking groups than Hana Financial Group.

The probe was an extension from earlier investigations into five commercial banks that took place from December 2017 to January this year.

By Son Ji-hyoung
(consnow@heraldcorp.com)