SEOUL : South Korean President Moon Jae-in nominated central bank board member Koh Seung-beom on Thursday as the new chief of the Financial Services Commission (FSC) regulatory body, in a move to address the continued buildup of household debt.
If appointed after the National Assembly hearing, Koh will replace current Chairman Eun Sung-soo, who took office in September 2019.
"With his extensive knowledge of macroeconomic and finance and experience in economic crisis response, (nominee Koh Seung-beom) will be able to address financial issues such as COVID-19 financial aid, household debt management and innovation of the financial industry, and help bring a swifter economic recovery," the presidential Blue House said in a statement.
The nomination comes weeks ahead of the Bank of Korea's (BOK) Aug. 26 policy meeting, where some economists predict the bank may raise interest rates, with the country becoming the first Asian economy likely to begin monetary tightening.
"Koh probably won't attend the August meeting, as he is likely to resign in days to prepare for parliamentary hearing for the chief regulator job," an official at the Bank of Korea told Reuters.
"There is a chance it could be a six-member meeting unless Governor Lee Ju-yeol appoints someone fast," the official added.
At the July meeting, Koh was the single dissenter who voted to raise rates as he argued that the sharp rise of household debt could eventually hurt economic growth and create asset bubbles.
Koh, in a separate statement, pledged to focus on economic recovery and overcoming coronavirus crisis, adding that "(the FSC) will thoroughly manage economic and financial risk factors such as household debt and asset price fluctuations".
He did not mention when he will step down from his current position nor whether he will attend the upcoming August meeting.
According to BOK law, a new member will be appointed should there be a vacancy in the seven-member board, while the new joiner will remain only until their predecessor's term of office.
Koh's term is until Apr. 20, 2023, after his term was extended in April last year. He has served as a board member since April 2016.
Separately, the FSC said it has recommended Jeong Eun-bo, the country's chief negotiator in defence cost-sharing talks with the United States, as the candidate to be the new chief of the financial watchdog, the Financial Supervisory Service.
(Reporting by Joori Roh, Cynthia Kim; Editing by Muralikumar Anantharaman and Raju Gopalakrishnan)