[금융포커스] “Institutional blame”, “Investor blame”… Yoon Seok-heon blames only others for fund crisis

Input 2020.12.28 14:24

Financial Supervisory Commissioner Yoon Seok-heon recently argued that the cause of the massive insolvency of private equity funds such as Lime and Optimus was due to the’current financial supervision system problem’ and argued for independence from the Financial Supervisory Service. It is belatedly in the financial sector that he said,’It is the blame of the wanted investor.’ In the financial sector, despite the fact that many FSS employees were involved in the recent private equity crisis, it is pointed out that Director Yoon avoids responsibility for the failure of supervision and is urgent to’blame others’.

According to the financial sector on the 28th, Yun explained the FSS’ position on the private equity situation at the’Regulation and Korea’s Economic Ecosystem’ forum held at the Securities and Finance Research Institute of Seoul National University on May 28th. At that time, the forum was mainly attended by Seoul National University officials and current students, so director Yoon’s remarks were not well known.

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According to the attendees, Director Yoon said that the cause of the private equity crisis is that investors are not satisfied with the general financial product returns and prefer high returns. He said that high risk is bound to follow for high profits, and financial companies also took advantage of this trend, which triggered the private equity crisis. In the end, they argued that the main cause of the private equity crisis lies in financial companies and financial consumers.

Director Yoon explained that the FSS’s accountability theory was that private equity funds could not be monitored in advance and could only receive follow-up reports, so the private equity crisis could not be prevented.

The reason that the forum remarks in May have been known to the financial sector lately is due to the recent assertion of the independence of the Financial Supervisory Service, saying, “The main cause of the private equity crisis is the current financial supervision system.” Director Yoon said at a year-end press conference held online on the 23rd, “To develop the financial industry while gaining consumer trust and preventing damage to consumers, reorganization of the financial supervisory system is paramount.” It is unclear where the responsibility between the Financial Services Commission) and the executive (the Financial Supervisory Service) is, but this same thing happened with the private equity crisis,” he said.

Director Yoon argued that the savings bank crisis and the Tong Yang Securities crisis were also caused by the financial supervisory system as well as the private equity crisis. “In other words, it means that the FSS should maintain its independence.”

As such remarks became known, some point out in the financial sector that Yoon blamed the private equity situation on’investors and financial companies’ and’to the financial supervisory system’, and that he would not admit the FSS’s failure to supervise. There are also criticisms that it is a’traditional remark’ for the fact that Director Yoon, who usually pursued’protection of financial consumers’ as a top priority, said the private equity situation as’the issue of investors seeking high returns’.

An official from the financial sector said, “I don’t know why the FSS chief transfers responsibility during such a difficult time and causes trouble.”

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