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Democratic Party leader Jung Chung-rae speaks at a party leadership meeting at the National Assembly on September 15. / Source: Song Ui-ju

The Democratic Party of Korea (DPK) has decided to fast-track legislation establishing a new Financial Supervisory Commission, setting the stage for a fierce clash with the conservative People Power Party (PPP). The move comes just a day after bipartisan agreement on three special counsel bills (covering insurrection, first lady Kim Keon-hee and the late soldier Chae Sang-byeong) collapsed, further heightening tensions in the National Assembly.

According to political sources on September 15, the DPK resolved at an internal meeting to adopt a “two-track” strategy for government reorganization bills. Measures deemed passable in the plenary session will be handled during the current session, while contentious ones—such as the financial reform plan—will be designated for the fast-track process if negotiations break down. “If the opposition blocks it, we have no choice but to send it to the fast track,” said Moon Jin-seok, the party’s deputy floor leader for operations.

At the core of the reform is splitting policy and supervisory functions, currently both held by the Financial Services Commission. The plan would transfer policymaking to the Ministry of Economy and Finance, while granting supervisory authority to a newly created Financial Supervisory Commission. The DPK argues that “having both powers under one roof has made oversight toothless.”

The PPP has denounced the initiative. Yoon Han-hong, PPP lawmaker and chair of the parliamentary committee on political and financial affairs, criticized the lack of prior consultation, calling the plan “slapdash” and ignoring voices from the field. Resistance has also surfaced inside the Financial Supervisory Service, where some 700 employees staged a protest in black clothing.

The latest clash stems from the collapse of the special counsel compromise. Originally, the PPP had agreed to cooperate on the financial bill in exchange for strict limits on the scope of investigations. But President Lee Jae-myung and hardliners in his party vetoed the trade-off, insisting that “uncovering the truth about the insurrection cannot be bargained away for organizational reform.”

Observers say the dispute threatens to paralyze more than just one bill. With both the chair and secretary of the finance committee hailing from the PPP, unilateral passage by the DPK is practically difficult. Even if put on the fast track, the process could take up to 330 days, potentially delaying the reorganization until well into next year.

The PPP has labeled the DPK’s move “irresponsible.” Rep. Kang Min-kook said at a party meeting, “This reckless reorganization plan pays no attention to how it will affect future financial policy or the national economy. It is a wholly irresponsible decision by the Lee Jae-myung administration.”