[Author’s Note] Although news related to the stock market is released daily, it’s hard to find the voice of the “small investors” in the news. As a journalist who is also an individual investor, I experience the ups and downs of losses and gains every day. Despite visiting more sites and meeting more people than the average investor, I aim to thoroughly deliver unspoken aspects from an individual perspective.
“In a scenario where a restaurant serves both beef stew and cold noodles together is now serving them separately, it begs the question if this would be deemed good service… Even if the Government Organization Act is revised to adjust the functions of the Financial Services Commission (FSC), the leadership won’t change.”
This statement was made by a ruling party lawmaker during the confirmation hearing for Lee Ok-won, the nominee for FSC Chairman, in response to the opposition’s criticism regarding the government’s plan to restructure the organization, which includes dissolving the FSC.
The opposition pointed out that if the government reorganizes and dismantles the FSC, the hearing aims to evaluate a “ten-day” chairman, suggesting the temporary nature of the role. The lawmaker defended this by using the analogy of beef stew and cold noodles, although the organization’s restructuring appears more complex. While stew and noodles are on equal footing, policy and supervisory functions have distinct differences.
If the FSC’s current policy functions were transferred to the Ministry of Economy and Finance (MOEF), the hearing would have been much shorter. There would be no need to question nominee Lee Ok-won about future directions of small business-related financial policies, expansion of venture capital, financial industry’s mutual growth fund contributions, real estate finance policies, and virtual asset-related policies.
The FSC’s role would then be limited to ensuring proper internal controls in the financial sector and overseeing stock manipulation investigations. Historically, the FSC was established to ensure expertise in financial policy—reflective of criticisms that the MOEF had too many policy functions.
Opinions on the FSC’s organization vary in academia. Some suggest it should solely focus on supervisory functions in line with its original intent, while others view the current FSC framework as an improvement over the limitations of past structures.
Ultimately, there’s no definitive answer, and the structure depends on the final decision-maker’s intentions. However, the current organizational restructuring process seems unlikely to escape criticism.
Discussions about dismantling the FSC have emerged since the beginning of Lee Jae-myung’s government. The now-defunct National Planning Committee had raised the need to downsize the FSC. However, these discussions suddenly disappeared. President’s praise for FSC’s real estate measures and the appointment of Kwon Dae-young as Vice Chairman reinforced expectations of the FSC’s continuation. Furthermore, appointing a close confidant of the president as the Financial Supervisory Service Governor and excluding organizational restructuring discussions from the new government’s economic growth strategy seemed to halt the dismantling of the FSC.
Given the government’s core strategy of capital market reform, the role of the FSC has expanded, which supports this prediction. Dissolving the FSC, given its many duties, seemed unfeasible even if policies remain; inevitable delays would arise from personnel reassignments and department transfers.
The process of pursuing this restructuring was contentious. The ruling party’s Policy Coordination Committee called a meeting the day before the FSC Chairman nominee’s hearing, causing strong opposition from opposition members. They argued there was no point in holding a hearing for a restructuring plan already announced without informing the standing committee overseeing the FSC.
Even the ruling party members seemed unaware of the FSC’s dissolution plan, learning about it only a day before its announcement. Despite a hasty defense using the stew and noodle analogy, the lack of compelling persuasion seems due to the unexpectedness of the move.
Of course, the nominee for FSC Chairman will likely not serve for merely “ten days.” Industry predictions expect the nominee to become the future Financial Supervisory Commission Chairman, while the current Financial Supervisory Service Governor may be reassigned to head the Consumer Protection Agency.
The FSC Chairman is a minister-level position, and importantly, the FSC remains the highest authority for financial policy. Essentially, it’s a move to eliminate a government department. Shouldn’t there have been more public discussions and consultations on this issue?