On September 23, 2025, South Korea’s financial sector was rocked by a wave of high-level resignations, as the entire executive team of the Financial Supervisory Service (FSS) submitted their resignations at the request of Governor Lee Chan-jin. This sweeping move, which followed similar mass resignations at the Ministry of Strategy and Finance and the Financial Services Commission (FSC), signals a period of turbulence and transformation within the country’s economic governance, according to multiple major Korean news outlets including Yonhap News and Seoul Finance.
The dramatic shakeup comes amid an ongoing government push to overhaul the structure and functions of key financial oversight bodies. Sources at the FSS confirmed that all three deputy governors and eight assistant deputy governors—11 executives in total—handed in their resignations after being asked to do so by Governor Lee. A spokesperson for the FSS explained, “This was done in a similar context to the mass resignation requests at the Ministry of Strategy and Finance and the Financial Services Commission.”
Just days earlier, top-ranking officials at the Ministry of Strategy and Finance and the FSC had also been asked to step down. The coordinated nature of these resignations has led many observers to interpret the moves as a strong signal of the new administration’s determination to reform and revitalize the country’s financial regulatory apparatus. As Newsis reported, “The fact that all executives from the Ministry of Strategy and Finance, the Financial Services Commission, and now the Financial Supervisory Service have submitted their resignations is being seen as a sign of the new government’s strong will for organizational reform.”
At the heart of this upheaval is a sweeping government plan to restructure the country’s financial oversight bodies. The proposal calls for splitting the Ministry of Strategy and Finance into two separate entities: the Ministry of Planning and Budget and the Ministry of Economy and Finance. Under this new arrangement, the domestic financial policy functions of the FSC would be transferred to the newly formed Ministry of Economy and Finance. The FSC itself, stripped of its policy functions, would be reorganized into a Financial Supervisory Commission, while its subordinate agency, the FSS, would be spun off as a separate Financial Consumer Protection Agency. As Seoul Finance noted, “The government is pushing to transfer the financial policy function of the FSC to the Ministry of Economy and Finance and to reorganize the remaining organization into a Financial Supervisory Commission.”
This ambitious reorganization is intended to streamline the country’s financial regulatory structure and better protect consumers in an increasingly complex financial landscape. According to KBS News, “There was a consensus that the council’s activities should be strengthened to prevent blind spots in financial consumer protection.” The Ministry of Strategy and Finance has been actively analyzing the financial system and market functions and is in the process of supplementing the work of the Financial Consumer Protection Council, which held a regular meeting on September 23 attended by three deputy ministers and eight deputy minister-level officials, along with 11 other key members.
Despite the internal turbulence, the Ministry of Strategy and Finance sought to reassure the public and international observers about the stability of South Korea’s financial system. In an official statement released on September 23, the Ministry emphasized that the country’s external reserves are more than adequate to weather potential external shocks. According to the Ministry, “Korea’s external reserve adequacy is sufficient to cope with possible external shocks.” The Ministry further explained that Korea’s reserves are assessed according to standards set by international bodies such as the International Monetary Fund (IMF) and the Bank for International Settlements (BIS), and that the nation’s reserve levels are not insufficient by these benchmarks.
The Ministry also highlighted that there is no single, internationally recognized numerical target for reserve adequacy. Instead, the adequacy of reserves is evaluated based on a mix of quantitative and qualitative factors, taking into account the specific circumstances and vulnerabilities of each country. As the Ministry pointed out, “Korea, like other countries with similar economic structures, must carefully assess the adequacy of external reserves considering the complexity and opportunity costs.”
The IMF’s External Sector Report, published on July 25, 2025, gave Korea a positive assessment, stating that the country’s external reserves are “adequate to respond to possible external shocks.” The report noted that Korea’s reserves account for 22% of GDP, with a current account surplus ratio of 2.1 times and an export-import ratio of 6.4 times. Stress tests confirmed that these reserves provide a significant buffer against external shocks. The Ministry underscored the importance of “continuous monitoring of external risks and maintaining appropriate reserve levels.”
Back on the domestic front, the mood within the affected ministries and agencies has been described as unsettled. As reported by Yonhap News, “The atmosphere of confusion in economic ministries is expected to continue as all executives of the FSS have also submitted their resignations, following similar moves at the Ministry of Strategy and Finance and the FSC.” Some analysts have speculated that the government’s swift and comprehensive approach to organizational reform may accelerate the implementation of its restructuring plans. Others, however, have suggested that the resignations may simply be a procedural step, as it is customary for new agency heads to request resignations from senior staff before considering reappointments or making new appointments.
The Financial Consumer Protection Council, which convened its regular meeting on September 23, has emerged as a focal point for these reforms. Officials in attendance, including deputy ministers from the Ministry of Strategy and Finance and the FSS, discussed ways to strengthen the council’s activities and close any gaps in consumer protection. According to KBS News, “There was a consensus that the council’s activities should be strengthened to prevent blind spots in financial consumer protection.”
As the government forges ahead with its reorganization plans, the coming weeks are likely to be critical in determining the future direction of South Korea’s financial oversight landscape. Will these sweeping changes lead to a more resilient and consumer-focused regulatory system, or will the current atmosphere of uncertainty persist? For now, all eyes are on the next steps of the administration and the potential appointment of new leaders to guide the country’s financial institutions through this period of transformation.
With the entire senior leadership of the FSS and other key agencies now in flux, South Korea’s financial sector stands at a crossroads—one that could reshape the nation’s approach to financial governance and consumer protection for years to come.
