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Financial Supervisory Service

About Financial Supervisory Service

The Financial Supervisory Service (FSS) was established on January 2, 1999, as Korea’s fully consolidated supervisory authority in accordance with the Act on the Establishment of Financial Supervisory Organizations (the “Establishment Act”), which the National Assembly passed on December 29, 1997.

The Establishment Act established the FSS as a specially legislated quasi-government supervisory authority, with responsibility for financial supervision across the entire financial sector.

Background before Establishment

Before establishing the FSS, financial supervision in Korea took place through four separate sectoral authorities, while the Ministry of Finance had a significant overarching supervisory role:

• Within the banking sector, the Office of Banking Supervision (under the Bank of Korea) examined commercial banks and foreign bank branches.

At the same time, the Ministry of Finance oversaw government-affiliated policy banks and nonbank credit institutions.

• Supervision of the securities sector was shared by the Securities Supervisory Board jointly with the Ministry of Finance.

• The same held for the insurance sector - supervision was shared between the Insurance Supervisory Board and the Ministry of Finance.

• Supervision of other nonbank financial companies was generally divided between the Ministry of Finance and the Bank of Korea.

FSS established

The passing of the Establishment Act ended these fragmented approaches to supervision by combining each of these supervisory responsibilities under the FSS and establishing a single integrated authority for performing the broad task of financial supervision across all sectors.

Official Description