Input 2021.02.22 14:12 | Revision 2021.02.22 15:26
Intensive criticism of “The Electric Money Law is the Big Brother Law”
Eun Seong-soo “I’m angry with Han Eun”
The National Assembly on the 23rd and the Financial Services Commission on the 25th, Lee Ju-yeol to speak
Due to the conflict between the Bank of Korea and the government over the amendment to the Electronic Financial Transactions Act (Electric Money Act), many in the financial sector think of a’war’ that repeats every 10 years between the government and the BOK.
In 2010-2011, war was fought over the amendment to the BOK Act, adding financial stability to the BOK organizational objectives clause. Instead of adding financial stability to the BOK’s obligation, the BOK, the government, and the Financial Supervisory Service made a relocation over a plan to grant independent investigation rights to financial companies. As a result, financial stability was added as a responsibility, but the BOK added only a burden as it did not obtain the right to investigate. BOK Governor Lee Ju-yeol was the vice-president at the time and commanded the war on the Korean bank.
Prior to this, in 1997, the BOK and the government had an extreme conflict over an amendment to the BOK Act, requiring the BOK governor to assume the chairman of the BOK and BOK. Former Minister of Strategy and Finance Kang Man-soo described it as’a fight between Cain’s descendants’ in his memoirs.
The amendment to the Electric Money Act, which allowed the Financial Clearinghouse (KFTC) to see all transaction information of big tech companies such as Naver Pay and Kakao Pay, touched the long-standing trauma of the BOK. The reason why the BOK raised the level of criticism for the amendment to the Jeon Bank Act from’Invasion of the Central Bank’s Unique Rights’ to’Big Brother Act’ is because of its willingness to “cannot lose this time.” In particular, it is said that President Lee Ju-yeol’s will was determined. Here, as the emotional remarks made by Eun Seong-soo, chairman of the Financial Services Commission, “I’m angry with the Korean bank,” were released to the media, and the mayor is keenly keen on the remarks of Governor Lee Joo-yeol scheduled on the 23rd and 25th.
This is not the first time that the BOK has set a day in the government. In 2009, the amendment to the BOK Act, which added financial stability to the BOK’s responsibilities and strengthened the authority to inspect and investigate financial companies, is the closest example. The BOK secured independence in monetary policy by the 1997 amendment of the BOK Act, but it lost its supervisory function as the banking supervisory service under its subsidiary fell into the current financial supervisory service. The BOK, which judged that it could restore the function of direct investigation into financial companies, committed itself to the provisions of financial stability, and in 1997 began a high-intensity public opinion battle reminiscent of the’war of independence from Korea’.
However, the revision of the BOK Act in 2011 added’financial stability’ to the purpose of the BOK’s establishment, but it was made without the right to investigate. Concerned about the erosion of authority, the Financial Supervisory Service, the Financial Services Commission, and the National Assembly’s Political Committee actively opposed it, and the Ministry of Strategy and Finance also held back the BOK with a dissenting opinion. As a result, only financial stabilization obligations were added and the supervisory means of investigation rights was not obtained.
At that time, in the National Assembly, the Planning and Finance Committee, which was in charge of the BOK, added strength to strengthening the BOK’s authority. It is similar to 10 years ago that the expansion of the standing committees of the National Assembly appeared as members of the Gyeonggi Committee raised the hand of Han Eun in this conflict related to the Jeongeum Act.
The reason why the BOK strongly opposes the’proposal law amendment’ promoted by the Financial Services Commission is because this is also linked to the central bank’s authority problem. The management responsibility and authority for the payment and settlement system rests with the central bank, which is essentially the final lender. However, the amendment to the Fund Act allows the Financial Services Commission to manage and supervise transactions of big tech companies with KFTC as an external clearing institution. The Financial Services Commission makes it a reason to strengthen consumer protection as transactions through big tech companies such as Naver Pay and Kakao Pay are active. However, the BOK believes that it intends to exert control over the Financial Clearings Institute, the central bank’s payment and settlement management agency, through external liquidation of big tech companies.
After the Democratic Party lawmaker Yoon Gwan-suk (Chairman of the Political Affairs Committee) proposed an amendment to the Jeon Money Act in November, the BOK refuted that it was “infringement of the central bank’s own right. Since then, the two organizations have had contact under water several times, but they have not been able to find a contact point, and the conflict began to expand in the second round as a revised bill was proposed on the 17th of this month. The BOK raised the intensity of criticism to the next level, saying that this amendment, which required the KFTC to collect internal transactions of big tech companies, was called the’Big Brother Act’, which may infringe on personal information. It also emphasized that there is no unprecedented global view of big tech companies’ internal transactions by certain government agencies, including China.
The conflict over the amendment to the Jeongeum Act is now spreading to the heads of each institution. Last year, BOK governor Lee Ju-yeol and financial chairman Eun Seong-soo once exchanged public comments, but this time the level of conflict has risen. Chairman Eun Seong-soo said on the 19th, “Big Brother is misunderstood and angry with Han Eun,” and the emotional goal is deepening.
Some are interpreting the postponement of appointments by the Financial Services Commission and Jugeum-gong over the position of the vice president of the Housing Finance Corporation, where Korean bankers go to, in connection with this conflict. Within the BOK, the appointment process has not been carried out in a situation where a nominee has already been decided, which also disrupts executives’ personnel. From the perspective of the BOK, which also gave up the position of the FSC in 2019 to a former FSC, public opinion against the FSC is growing. An official from a financial institution said, “There is a talk that the Financial Services Commission is deliberately delaying the procedure for appointing the vice president for the purpose of pressing the BOK in relation to the conflict with the Jeon Keum Law.”
As the issue of the central bank’s own authority and the legitimacy of the bill is now spreading into an emotional fight, more attention is being paid to the public remarks of governor Lee Joo-yeol scheduled on the 23rd and 25th. This is because there is a high possibility that Governor Lee will make a statement once at the meeting of the National Assembly Committee’s business report on the 23rd, a day later, and make additional remarks at a press conference on the 25th.
Moreover, since Chairman Eun made some emotional remarks, the level of Governor Lee’s remarks is drawing attention. It is noteworthy what the outcome of the conflict between Chairman Eun (then, then head of the International Finance Bureau of the Ministry of Finance and Economy) and Lee, who stepped aside from the front during the 2010 Korean-Bun Law War.
Governor Lee spent an unusually long time at a briefing session immediately after the Financial Services Commission on November 26 last year, saying, “We are judging whether it is excessive and unnecessary involvement in the central bank.” At that time, it was evaluated that the governor, who had spared unnecessary words and paid attention to the use of terms, was making a decision and speaking.