Korean financial watchdog chief stresses breaking bureaucratic cartels

Lee Bok-hyun, head of the Financial Supervisory Service (FSS), announces at the 2023 Anti-Corruption and Integrity Workshop held at the FSS in Yeouido, Seoul on July 4. [Photo by Yonhap]

Lee Bok-hyun, head of the Financial Supervisory Service (FSS), recently instructed FSS employees to be wary of engaging with former FSS bureaucrats who have moved to the private sector, including financial companies, following the Yoon Suk Yeol government’s stance on curbing cartels for profit across the industry.

“Given the growing concerns about power cartels in our society, we must refine our sense of duty and conduct our supervisory and inspection duties with utmost rigor, adhering to principles,” Lee said during a workshop held by the South Korean financial watchdog on Tuesday.

“In personal interactions with former FSS officials who are now employed in financial institutions or with regard to their recruitment by financial companies, we must ensure that there is no room for misunderstanding from the perspective of the general public,” he added.

Lee’s remarks serve as a cautionary message and a warning against any actions by former FSS officials that could be perceived by the public as cartel-like behavior.

These individuals, leveraging their personal networks, may seek meetings with current FSS employees to secure their cooperation in advancing the interests of their present organizations.

According to the data on reemployment of FSS retirees from 2018 to 2022 released by Representative Choi Seung-jae’s office, a total of 125 individuals have made the transition from the FSS to various financial institutions, law firms, and public agencies.

Notably, many FSS retirees have assumed executive and auditing roles at banks, credit card companies, and other financial institutions.

These former financial regulators, now active in the private sector, enjoy substantial salaries for providing advisory services and response measures related to new financial policies from the government.

Lee urged FSS officials to uphold not only their professional competence but also high ethical standards, saying that “even the slightest deviation from the public’s expectations can jeopardize the hard-earned trust in our financial supervisory organization.”