BAI Recommends Integration and Establishment of Financial Department

The establishment of an integrated financial supervisory institution, tentatively being called “the financial department,” is expected to integrate three government bodies: the financial policy bureau of the finance ministry, the Financial Supervisory Commission and the Financial Supervisory Service.

The Board of Audit and Inspection will hold an inspection commissioner meeting on Tuesday to deliberate on the results of a special inspection into “the actual conditions of financial supervisory operation” touched off by the LG card Co. case and finalize a recommendation of supervisory system reorganization.

A high-ranking official of the BAI said, “Even though there had been signs of insolvency in the LG card Co. since 2001, adequate handling wasn’t conducted due to non-cooperation and government organization selfishness among the three supervisory authorities: the finance ministry, the Financial Supervisory Commission and the Financial Supervisory Service.”

The official said that the BAI would adopt a plan to establish a unified financial department, integrating these three supervisory agencies into one body, and submit it to the Presidential Committee on Government Innovation and Regional Decentralization.

The BAI decided to recommend to the Presidential Committee on Government Innovation and Regional Decentralization that the financial department be centered on the civil service and increase the number of non-official civilians in its decision-making body, the standing committee, that it should improve professionalism, that it should block personnel exchanges with other government organizations, and that the finance ministry should take charge of authentic macro-economic policies.

The BAI is said to regard the ailing LG card case as the result of a wrongful supervisory system, and take a measure of warning from it against the three agencies, including the finance ministry, and take heavy disciplinary action on the part of those who are responsible in the Financial Supervisory Service.

Young-Hae Choi yhchoi65@donga.com