ID :
199034
Thu, 08/04/2011 - 02:04
Auther :
Shortlink :
https://oananews.org//node/199034
The shortlink copeid
Empty regulatory reforms
Korea Times
(Yonhap) - The plan for financial regulatory reform reported by a governmental task force Tuesday is too poor to deserve its title.
Most of the renovation steps cited in the report were a rehash of the existing steps, measures resolved or already taken by incumbent regulators. All key issues, including the overhaul of regulatory systems and the introduction of a financial consumer protection agency, were billed as "mid- to long-term tasks" that should be handled by the next administration.
These are largely predictable results since the Prime Minister's Office hurriedly launched the task force at the request of President Lee Myung-bak in May. Time was too short, while the problems were too deep-rooted and the task too complicated. The composition of the 11-member task force was also problematic. Out of the six public officials, four were financial bureaucrats who messed things up: Those who should be reformed became reformers.
It is small surprise then that they failed ??? or did not try ??? to find the cause of and trace the responsibility for the ongoing savings bank fiasco, the joint product of irresponsible policymakers, loose supervisors and unethical industrialists, and the widespread corruption that links them.
What all this shows is the government cannot entangle the current financial scandal rocking the nation's financial and political communities by nabbing and punishing a few bankers now hiding abroad. Nor can the nation expect to overhaul its inefficient and corrupt financial sector by throwing away a few savings banks and rescuing others at, once again, taxpayers??? expenses.
President Lee's anxiety to keep the ongoing scandal from tarnishing the image of the entire administration is understandable. As ignominious and politically destructive as it is, the chief executive must look beyond this specific financial incident and take more fundamental steps toward rebuilding the nation's financial system. Instead of calling foreign leaders for the extradition of financial criminals, Lee should order the formation of a new task force, not under the prime minister but the President's own control, and start it from the ground up.
And that must begin by admitting that the incumbent administration's financial system centering on the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) got off on the wrong foot.
Under the current structure, the FSS cannot fully wield its supervisory function of financial firms by running against the intentions of its policy-making superior agency, the FSC. Even more seriously, the FSS' operating budget comes from the contribution of financial firms' transaction fees, indicating the supervisor is tied up structurally by the objects of its supervision.
So the proposed task force's foremost job would be to disperse the concentrated power of the FSC, formerly the financial bureau of the powerful Ministry of Finance (MOF), indicating it is new headquarters of the "Mofia," a fraternity of present and former MOF officials which has put the nation's financial sector under its thumb.
Nobody less than the chief executive can wield a scalpel for the major surgical operation of the nation's ailing financial sector.
We think this is a worthy goal for the legacy-short Lee administration. The problem is whether the President has the will and the ability to shatter the decades-old fortress of the Mofia. Lee must start by sacking his own confidantes now sitting at the top posts of large banks.
(Yonhap) - The plan for financial regulatory reform reported by a governmental task force Tuesday is too poor to deserve its title.
Most of the renovation steps cited in the report were a rehash of the existing steps, measures resolved or already taken by incumbent regulators. All key issues, including the overhaul of regulatory systems and the introduction of a financial consumer protection agency, were billed as "mid- to long-term tasks" that should be handled by the next administration.
These are largely predictable results since the Prime Minister's Office hurriedly launched the task force at the request of President Lee Myung-bak in May. Time was too short, while the problems were too deep-rooted and the task too complicated. The composition of the 11-member task force was also problematic. Out of the six public officials, four were financial bureaucrats who messed things up: Those who should be reformed became reformers.
It is small surprise then that they failed ??? or did not try ??? to find the cause of and trace the responsibility for the ongoing savings bank fiasco, the joint product of irresponsible policymakers, loose supervisors and unethical industrialists, and the widespread corruption that links them.
What all this shows is the government cannot entangle the current financial scandal rocking the nation's financial and political communities by nabbing and punishing a few bankers now hiding abroad. Nor can the nation expect to overhaul its inefficient and corrupt financial sector by throwing away a few savings banks and rescuing others at, once again, taxpayers??? expenses.
President Lee's anxiety to keep the ongoing scandal from tarnishing the image of the entire administration is understandable. As ignominious and politically destructive as it is, the chief executive must look beyond this specific financial incident and take more fundamental steps toward rebuilding the nation's financial system. Instead of calling foreign leaders for the extradition of financial criminals, Lee should order the formation of a new task force, not under the prime minister but the President's own control, and start it from the ground up.
And that must begin by admitting that the incumbent administration's financial system centering on the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) got off on the wrong foot.
Under the current structure, the FSS cannot fully wield its supervisory function of financial firms by running against the intentions of its policy-making superior agency, the FSC. Even more seriously, the FSS' operating budget comes from the contribution of financial firms' transaction fees, indicating the supervisor is tied up structurally by the objects of its supervision.
So the proposed task force's foremost job would be to disperse the concentrated power of the FSC, formerly the financial bureau of the powerful Ministry of Finance (MOF), indicating it is new headquarters of the "Mofia," a fraternity of present and former MOF officials which has put the nation's financial sector under its thumb.
Nobody less than the chief executive can wield a scalpel for the major surgical operation of the nation's ailing financial sector.
We think this is a worthy goal for the legacy-short Lee administration. The problem is whether the President has the will and the ability to shatter the decades-old fortress of the Mofia. Lee must start by sacking his own confidantes now sitting at the top posts of large banks.
