High-ranking officials of the Financial Supervisory Service will likely be subject to a tougher code of conduct and may face dismissal if they fail to meet annual internal assessments, officials said Sunday.
Currently, 12 FSS executives, three deputy governors and nine assistant deputy governors, are allowed to maintain their three-year term as long as they do not engage in criminality.
“In the wake of the recent corruption scandals of the watchdog’s several staffers, FSS governor Kwon Hyouk-se plans to make tougher internal assessment on their job suitability every year,” a regulatory official said.
He said the policy is aimed at banning most of the regulatory executives from enjoying their three-year tenure unscrutinized.
The assessment criteria are expected to include their performances and ethical scores.
The scheme, which was initiated by the FSS chief, is part of a plan to conduct a sweeping reform of internal structure following incumbent and former staffers’ irregularities concerning ailing savings banks.
The wrongdoings mostly involved staff overlooking illegitimate practices in the market in return for kickbacks.
The FSS is also planning to hand down tougher disciplinary sanctions against staffers implicated in actions that go against their code of conduct as regulatory officials.
“Staffers engaged in serious improprieties including taking kickbacks will be subject to dismissal,” the FSS said in a statement.
In addition, the watchdog said it will assess the ethics of all staff to prevent those with lower scores from working at certain departments.
The FSS has already decided to ban its staff from taking senior posts at financial companies right after their retirement as a way to prevent corruption.
It is seeking to completely bar the habitual practice under which incumbent and former staff were recommended as auditors for banks or brokerage firms.
“We will completely eliminate the practice. In addition to stopping our recommendation practice, we plan to reject this sort of call from financial companies,” the FSS said.
Retirees of the FSS have often taken top posts at commercial banks, which often gives the lenders networks to lobby the watchdog.
Prosecutors have uncovered a series of alleged ethical breaches by former and incumbent staff at the regulatory body.
The allegations involve a case that a senior FSS official leaked internal regulatory information after receiving 120 million won ($110,000) in bribes from debt-ridden Busan Savings Bank.
The official is suspected of instructing the savings bank to conceal irregularities, informing it of a scheduled low-key audit by the FSS.
Another employee at the financial watchdog has been taken into custody for receiving a car in return for glossing over irregular practices of Bohae Savings Bank.
By Kim Yon-se (email@example.com