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Feb 23, 2026
- FSC Introduces Measures to Promote Sound Development of Mutual Savings Banks
- Chairman Lee Eog-weon of the Financial Services Commission held a meeting with the CEOs of twelve mutual savings banks and related organizations and discussed ways to promote sound development of mutual savings banks on February 23. A Summary of Remarks by FSC Chairman Amid an enduring risk of default originating from real estate market volatility, digital transition in the financial industry, and a polarization in the savings banks sector, it is now crucial to have a structural transformation in the industry for the survival and growth of savings banks. Against this backdrop, the FSC has prepared a set of measures to promote sound development of savings banks to facilitate their transition away from the short-term profit driven and community-centered operational model toward a more real economy-oriented and nationwide operational approach. In this regard, the financial intermediary function of savings banks should move away from real estate and collateral operations toward the real economy sector, such as SMEs, MMEs, and small merchants, in a more balanced way. To help savings banks retain their competitiveness amid changing business environment, the FSC will seek to overhaul relevant regulations pertaining to their operating practices. In order to propel a transition toward productive finance and remove regulatory hurdles for savings banks, a condition of sound management practices should be met. Therefore, the FSC also plans to carry out regulatory reforms regarding the soundness and governance structure of savings banks commensurate with the size and role of savings banks. Key Measures a) Promoting a transition toward productive finance and upgrading rules on operating practices to make them more reasonable The FSC will seek to overhaul regulations to make the financial intermediary function of savings banks more balanced across the real economy, transitioning away from the real estate sector toward SMEs, MMEs, and small merchants. To this end, the FSC will seek
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Feb 11, 2026
- Household Loans, January 2026
- In January 2026, the outstanding balance of household loans across all financial sectors increased KRW1.4 trillion (preliminary), turning back up from the decline of KRW1.2 trillion in the previous month. (By Type) Home-backed mortgage loans increased KRW3.0 trillion, growing at a faster rate compared with the previous month (up KRW2.3 trillion). Mortgage loans dropped at a slightly faster rate in the banking sector (down KRW0.5 trillion down KRW0.6 trillion), but rose at a faster rate in the nonbanking sector (up KRW2.8 trillion up KRW3.6 trillion). Other types of loans edged down KRW1.7 trillion, declining at a slower rate compared with the previous month (down KRW3.6 trillion), as credit loans dropped at a slower pace (down KRW2.5 trillion down KRW1.0 trillion). (By Sector) In January 2026, household loans in the banking sector saw a drop of KRW1.0 trillion, declining at a slower rate compared with the previous month (down KRW2.0 trillion). Banks own mortgage loan products fell at a faster rate (down KRW1.4 trillion down KRW1.7 trillion), while policy-based mortgage loans rose at a slightly faster rate (up KRW0.9 trillion up KRW1.1 trillion). Other types of loans including credit loans declined at a slower rate (down KRW1.5 trillion down KRW0.4 trillion). In the nonbanking sector, household loans rose KRW2.4 trillion, growing at an expanded level from a month ago (up KRW0.8 trillion). Mutual finance businesses (up KRW2.0 trillion up KRW2.3 trillion) saw household loans edging up more rapidly, while insurance companies (down KRW0.02 trillion down KRW0.2 trillion) saw household loans declining at a faster rate. Specialized credit finance businesses (down KRW0.8 trillion down KRW0.02 trillion) saw household loans declining at a slower rate, while savings banks (down KRW0.5 trillion up KRW0.3 trillion) saw household loans shifting back up from a decline seen in the previous month. (Assessment) In January 2026, the outstanding balance of household loans edged up KRW1.
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Dec 22, 2025
- FSC Puts Forward Capital Market Reform Plans to Support Sustainable Foundation for Innovative Growth Ecosystem
- Chairman Lee Eog-weon of the Financial Services Commission presided over the third meeting on propelling a transition to productive finance with officials from the venture industry, financial institutions, market infrastructure providers, and experts on December 22. At todays meeting, officials discussed plans for capital market reform initiatives intended to transform capital markets into a key platform for propelling innovative growth. In his opening remarks, FSC Chairman Lee laid out four major policy initiatives put forward by the government. A Summary of Opening Remarks by FSC Chairman Throughout history, some of the key technologies and innovative ventures, such as the Internet, smartphone, and autonomous driving technology, have been born out of bold investment and infrastructure restructuring by the government together with the private sectors inventiveness and push for drive. Capital market constitutes a platform where this type of collaborative effort by the public and private sectors can most effectively result in innovation. Since the market can selectively determine future potential and bear risks to invest in long-term growth, it can serve as the most appropriate and productive platform to push for a productive finance drive. In this regard, the government plans to pursue capital market reform measures intended to boost the efficiency in the functioning of capital market infrastructures and facilitate a more seamless interconnection between the financial sector and innovative companies. First, from a market infrastructure perspective, in order to ensure safety in the transactions of startup and venture stocks, authorities will allow the entry of electronic securities registries specializing in unlisted stocks. With the introduction of electronic registration of securities tailored for small scale and unlisted stocks, there will be increased convenience for stock transactions and management, which will also help startups and venture businesses to raise
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Dec 15, 2025
- FSC Holds Market Monitoring Meeting and Decides on Continuous Operation of Market Stabilization Programs
- Chairman Lee Eog-weon of the Financial Services Commission presided over a meeting with relevant authorities, research institutions, and market experts on December 15 to review financial market conditions and risk factors going forward. A Summary of FSC Chairmans Remarks In the first half of this year, there were growing anxieties over financial markets due to the Trump administrations tariff policy and uncertainties regarding domestic politics. However, in the second half of the year, the Korean economy and market conditions recovered backed by rigorous policy efforts of the new government and improvement in corporate earnings in the semiconductor sector. Despite this overall sense of stability, there is growing vigilance over domestic financial markets with government bond yields showing an upward movement and the foreign exchange market showing an expanded level of volatility recently. Nonetheless, the Korean economy is sufficiently equipped with the resilience and the policy capacity to respond to crisis situations backed by strong fundamentals. First, domestic financial institutions have been maintaining an adequate level of soundness. Second, Koreas foreign exchange reserve is the ninth largest in the world. Third, credit default swap (CDS) premium in Korea has been brought down significantly from the beginning of this year. In addition, some of the potential risk factors and structural problems for the economy, such as household debt, real estate project finance, and the soundness of nonbank financial institutions, are also being adequately addressed and stably managed through ongoing policy measures. However, since it is possible to see growing market volatility in the future, the FSC will continue to closely work with related authorities to carefully monitor market conditions and take bold and proactive steps to employ market stabilization measures when it becomes necessary. Next year, the FSC will strive to push for major transformation in the financial in
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Nov 19, 2025
- FSC Announces Designation of CFIBEs and Capital Market Rules Change to Propel Supply of Venture Capital
- The Financial Services Commission announced the designation of comprehensive financial investment business entities (CFIBEs)at the 20th regular meeting held on November 19. The FSC decided to designate Korea Investment Securities and Mirae Asset Securities as CFIBEs with the minimum equity capital level of KRW8 trillion, while Kiwoom Securities has been designated as a CFIBE with the minimum equity capital level of KRW4 trillion. Kiwoom Securities has also been authorized to engage in a short-term financing business. The newly designated CFIBEs have each been making relevant preparations for the operation of investment management account (IMA) and promissory note services, by acquiring the satisfactory level of personnel and facilities capacities, preparing internal control mechanisms, and setting up measures to prevent conflicts of interest. Korea Investment Securities and Mirae Asset Securities plan to develop IMA products with the goal of introducing them in the market within this year. Kiwoom Securities also plan to introduce promissory notes within this year. This will help to open up and diversify investment options and mechanisms made available for the public and facilitate the sharing of profits from CFIBEs asset management services. Meanwhile, the government approved the revision bill for the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) at the cabinet meeting held on November 18, 2025. The revised rules, which make CFIBEs subject to the supply of venture capital, are intended to propel the financial investment sectors transition toward productive finance. Along with expected revisions to subordinate rules and regulations, the revised Enforcement Decree will take effect next week (between November 25 and 27). Key Revision Details Requiring CFIBEs to supply venture capital To promote more active supply of venture capital from the CFIBEs that are engaged in IMA and promissory note services, the revised rules will make
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Oct 22, 2025
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Sep 19, 2025
- FSC Holds Inaugural Meeting on Transforming Financial Industry for Productive Finance
- Chairman Lee Eog-weon of the Financial Services Commission presided over the inaugural meeting on transforming the financial industry and seeking a transition toward productive finance on September 19. Todays meeting was joined by industry representatives from different regions and officials from different business sectors and sizes who shared their ideas and suggestions in collaborative efforts to seek growth in both the real economy and financial sectors. Key Measures I. Transforming Financial Industry for Productive Finance In his opening remarks, FSC Chairman Lee said that the Korean economy is currently standing at an inflection point where the role of finance is considered to be ever more critical in providing solutions to various problems, such as low growth and wealth gap, and rebooting growth in the economy. To seek a transition toward productive finance, Chairman Lee introduced plans to pursue transformation of the following three areaspolicy finance, financial business, and capital markets. (Policy Finance) Policy financial institutions will lead the channeling of capital toward high-tech and venture businesses and local economies. The KRW150 trillion National Growth Fund intended for future strategic industries and their supply chains and infrastructures will provide targeted investments. The role of policy financial institutions for providing guarantees on real estate financing will be downsized, while that for providing technology financing will be boosted. At the same time, policy financial institutions will develop region-specific financing models intended to spur growth of local economies. (Financial Business) By seeking improvements to the overall supervisory framework, specific sector-targeted transition measures will be pursued. In this regard, capital regulation in the banking and insurance sectors will be upgraded to bring them to more reasonable levels and to facilitate banks and insurance businesses to more actively supply capital to producti
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Sep 07, 2025
- Authorities Hold Meeting and Announce Additional Measures to Strengthen Household Debt Management
- The Financial Services Commission held a meeting on household debt with officials from related government ministries, industry groups, and housing loan and guarantee institutions on September 7 and announced additional measures to tighten household debt management to implement the governments housing supply expansion plan. At the meeting, officials assessed that household debt growth decelerated amid the implementation of the strengthened household debt management measures (announced on June 27). However, the pace of growth expanded somewhat in August with housing prices also increasing in certain regions. In addition, officials pointed out that due to recent expectation about interest rate cuts, there exists market expectation for rising real estate prices. In this regard, officials viewed that it is necessary to introduce additional measures, while ensuring a consistent implementation of the June 27 household debt management measures. Additional Measures to Strengthen Household Debt Management Strengthen Loan-to-Value Regulation in Regulated Areas (50% 40%) The loan-to-value (LTV) ratio applied on mortgage loans for purchasing homes in the speculation regulated areas will be tightened to 40 percent from the previous level of 50 percent. This will help to contain demand for loans especially in the speculation regulated areas, while helping to improve the soundness management for both households and financial companies. Restrict Loans to Private Housing Business Entities (LTV = 0%) The loan-to-value ratio applied on mortgage loans for those registered as housing business entities (for purchasing and leasing purposes) will be set at zero percent in the Seoul metropolitan area and/or speculation regulated zones, which will help to restrict the issuance of business loans in ways that could bypass the tightened mortgage rules. However, as there are concerns about potential shortages in rental housing, exemptions may be granted for newly built housing units upon approval
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Jul 09, 2025
- Authorities Lay Out Plans to Stamp Out Unfair Trading Activities in Stock Markets
- The Financial Services Commission, the Financial Supervisory Service, and the Korea Exchange introduced joint measures to stamp out unfair trading activities in stock markets on July 9. The financial authorities have held a series of meetings and discussions in the past month to seek ways to strengthen initial response and ensure strict punishment on unfair trading activities (price manipulation, etc.). The following measures have been prepared based on these discussions. Key Measures I. Establish a Joint Response Team to Root Out Stock Price Manipulation Under the current response system for unfair trading activities, the examination (KRX) and investigation (FSC FSS) functions are dispersed across different organizations, and they each have different levels of authority, for instance, to check financial (securities or bank) accounts or force investigation. This led to the problem of delay in responding to cases which required urgent actions from the authorities. Thus, in order to boost the efficiency in examination and investigation, the FSC, the FSS, and the KRX plan to establish a joint response team to root out stock price manipulation. The joint response team, a collaborative operation among the FSC, the FSS, and the KRX, will be set up at the KRX with an aim to bolster the initial response function of KRXs market surveillance committee. The joint response team will work under the same workspace and perform investigations on important cases that require urgent response together from the early stage. In the process, each organization (FSC, FSS, and KRX) will make utmost use of its investigative authority to promptly carry out investigations on cases associated with (a) frequent rule-breakers, (b) largest shareholder or company executives, (c) use of false information on social media, etc. II. Upgrade KRXs Surveillance System to Make It More Individually-focused (from account-based system currently) and Adopt AI Technology in Market Surveillance Under the current
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Apr 23, 2025
- FSC Chairman Visits Boston and New York to Strengthen Financial Cooperation
- Chairman Kim Byoung Hwan of the Financial Services Commission visited Boston and New York, the United States on April 21-22. On April 21, Chairman Kim visited Bostons biotech cluster and held a meeting with the investment companies and Korean biotech firms operating in the U.S. to seek insights on ways to bring about regulatory improvements to promote Koreas biotech venture investment. On April 22, Chairman Kim visited New York and had meetings with Blackstone CEO Stephen Schwarzman and Korean financial companies that have established business operations in New York. Visit to Boston Visit to KHIDIs U.S. Office On April 21, Chairman Kim visited the Korea Health Industry Development Institute (KHIDI)s U.S. office in Boston to gain overall insights into the regions biotech cluster (Kendall Square, aka the most innovative square mile on the planet), which is the worlds largest biotech venture ecosystem hosting more than a thousand biotech companies, research institutions, hospitals, and universities. During his visit, Chairman Kim was also briefed about Korean biotech companies operating in the U.S. and the support made available by the KHIDI. Meeting with Venture Capital Investors Chairman Kim held a meeting with a group of Korean venture capitalists operating in Bostons biotech cluster to seek diverse opinions and gain insights on ways to cultivate a biotech venture investment ecosystem in Korea. At the meeting, Chairman Kim said that Koreas venture investment has declined after reaching a peak in 2021-2022, particularly in the biotech sector associated with high risks where long-term investments are required. Since investors may face difficulties in making an exit in the biotech industry, Chairman Kim said that there are concerns over a potential fall in the biotech venture ecosystem. In this regard, Chairman Kim sought diverse recommendations and opinions from participants that will help to foster a biotech venture ecosystem in Korea. Visit to AVEO Oncology Chairman
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Apr 14, 2025
- New Sanctions Mechanisms on Unfair Trading and Illegal Short Sale Activities to Take Effect from April 23
- The Financial Services Commission announced that the government approved the revision bill for the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) intended to establish new sanctions mechanisms against unfair trading and illegal short sale activities at the cabinet meeting held on April 14. The revised Enforcement Decree is scheduled to go into effect on April 23, 2025 along with the revised FSCMA and subordinate regulations. Background The government has continuously worked to strengthen monetary sanctions through the introduction of penalty surcharge and the increased level of fine imposable against unfair trading and illegal short sale activities in capital markets. However, in order to more effectively prevent the recurrence of unfair trading activities, the need for introducing non-monetary sanctions mechanismssuch as an account freeze and a restriction from being appointed or serving as an executive officer at listed companieshas been called for taking examples from major overseas countries, such as the U.S., Hong Kong, and Canada. Therefore, this revision bill introduces the following non-monetary sanctions mechanisms(a) a restriction for rule-breakers from engaging in transactions of financial investment products and being appointed or serving as an executive at listed companies and (b) an account freeze (payment suspension) on the accounts suspected to have been used in unfair trading or illegal short sale activities. Key Revision Details I. Restriction from Engaging in Transactions of Financial Investment Products Application of Regulation Under the revised FSCMA, the FSC is authorized to restrict rule-breakers (those who have engaged in unfair trading and/or illegal short sale activities) from engaging in transactions of financial investment products for up to five years depending on the nature, seriousness, period, frequency, and the level of unfairly gained profits of the rule-breaking activities. In this regard,
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Apr 09, 2025
- FSC Introduces Plans to Improve Competitiveness of Corporate Financing by Securities Businesses
- The Financial Services Commission announced plans to improve the competitiveness of corporate financing by securities businesses on April 9. Under the newly introduced plans, comprehensive financial investment business entities (CFIBEs hereinafter) will be subject to increased credit granting limits for corporate financing and required to supply 25 percent of capital raised from promissory notes and investment management account (IMA) for venture capital. The IMA scheme, which was first introduced in 2017 but has not been utilized since, will go through improvements. Based on the improved IMA scheme, the process for designating CFIBEs that are eligible to handle promissory notes and IMA will begin within this year. Moreover, the plans contain measures to provide incentives for overseas expansion of securities firms and regulatory reforms intended to bolster the soundness management over derivatives-linked securities (DLS) and derivatives-linked bonds (DLB). In June this year, the FSC plans to prepare and announce detailed measures to strengthen the soundness of real estate financing and liquidity management by securities firms and ways to improve rules on the soundness of CFIBEs. FSC Chairman Holds Meeting with CEOs of CFIBEs On April 9, FSC Chairman Kim Byoung Hwan held a meeting with the CEOs of ten major CFIBEs and introduced the governments plans to improve the competitiveness of corporate financing by securities firms centered on regulatory improvements for CFIBEs. At the meeting, Chairman Kim and the participants discussed future directions for securities businesses in sustaining an innovative growth of our economy and promoting value-up in capital markets. In his opening remarks, Chairman Kim underscored the important role of capital markets in making sure that our economy maintains vitality and continues to grow in the future. In this regard, Chairman Kim said that the plans being introduced today are intended to boost the role of securities businesses in co
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Mar 24, 2025
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Feb 26, 2025
- Authorities Propose Comprehensive Measures to Prevent Mis-selling of Highly Complex Investment Products
- The Financial Services Commission and the Financial Supervisory Service introduced a set of measures intended to prevent mis-selling of highly complex financial investment products on February 26. Background In the aftermath of large-scale losses incurred to investors regarding the sales of Hong Kong index-linked ELS (equity-linked security) products by domestic financial companies in early 2024, the FSS prepared the guidelines for compensations on March 11, 2024, and the banking sectors compensation programs have been in progress. As a result, the numbers of compensations being paid out to investors, of cases in which investors have agreed to the terms of compensation, and of the ratio of compensation amount on average have all continued to increase between the end of June 2024 and the end of 2024. On-site inspections conducted by the FSS revealed that most bank branches had no clear distinction of counters between the ones selling highly complex financial investment products and those handling ordinary deposit-taking functions. As a result, great numbers of consumers could have been misled into believing that these highly complex financial investment products were principal-guaranteed products. Moreover, their sales practices revealed that financial companies placed a higher priority on sales performance rather than on the compliance of sales regulations. As a consequence, there was inadequate information provided to investors regarding the risk associated with highly complex financial investment products, and the sales of ELS products took place without the establishment of sufficient internal control mechanisms designed to prevent mis-selling and ensure protection of consumers. Against this backdrop, the FSC and the FSS have prepared measures to prevent mis-selling of highly complex financial investment products after having a series of meetings with related experts and industry groups. Key Measures a) Making improvements to financial investment products sales c
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Feb 18, 2025
- Revised Rules under FSCMA Pave Way for Resumption of Short Sale Transactions on Schedule from March 31
- The Financial Services Commission announced that the government approved the revision bill for the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) at the cabinet meeting held on February 18. This revision is aimed at upgrading rules on short sale practices. Imposing a Limit on Institutional Investors Stock Repayment Period (Article 208-6) The stock repayment period for institutional investors, which shall be determined by an agreement from both lender and borrower, should not exceed 12 months in total with maximum repayment periods of 90 days for renewal each time. However, in the case of delisting of stocks or suspended trading on the final day of repayment, or when an account-to-account transfer is being restricted, the final day of repayment will be moved to three business days from the day in which the cause of the payment delay is lifted. Introducing Measures Intended to Prevent Naked Short Sale Activities (Article 208-7) Corporate entities that have plans to engage in short sales of listed stocks and securities companies that receive and place short sale orders will be obligated to comply with a set of naked short sale prevention measures. Corporate entities with a net short position balance of 0.01 percent of total issuance volume (excluding net short position balance of less than KRW100 million) or KRW1 billion or more as well as market makers and liquidity providers (institutional investors) will be subject to the following rules. First, they will be required to set up and operate electronic net short position balance management systems to facilitate item-by-item short position balance management and prevent naked short sale activities. Second, they will be required to prepare internal control standards, which should specify details about the role and responsibility of employees, short position balance management system, the recording and bookkeeping of short sale transactions details for at least five years, and the
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Feb 05, 2025
- FSC Grants Final Approval to Nextrade for Operation of ATS Scheduled to be Launched on March 4
- The Financial Services Commission held a regular meeting on February 5 and granted final approval to Nextrade for operating an alternative trading system (ATS). The introduction of an ATS in domestic stock market will officially set off a multiple-exchange and competition-based stock trading system in Korea. As part of capital market reform efforts, the government first established legislative grounds for ATS in 2013 with aims to make capital market more accessible through diversification of stock market infrastructures and improvement in transaction convenience for investors. After granting preliminary approval to Nextrade in July 2023, the FSC and related organizations held a seminar on May 9, 2024 where the authorities introduced a set of measures on ATS operation and integrated market management and oversight plans. Based on diverse opinions discussed at this seminar, Nextrade took steps needed to prepare its organization and set up a trading operation and filed an application to the FSC on November 29, 2024 to obtain final approval for operating ATS. After having an external review conducted by a committee of private sector experts and going through a screening of qualifications by the Financial Supervisory Service (FSS), the FSC decided to grant final approval to Nextrade for the operation of ATS. Expected Changes in Trading Experience with Nextrade Nextrade plans to begin operating from March 4, 2025. Nextrades launch is expected to bring about increased benefits to investors, such as extended trading hours, availability of more diverse order types, and reduction in transaction costs resulting from competition over fees. The market oversight and supervisory framework will also shift to an integrated system to ensure investor protections. I. A new stock trading experience Aside from regular trading hours, which will be identically operated by both the Korea Exchange (KRX) and Nextrade, the ATS will operate pre-market (between 08:00 and 08:50) and after-market
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Jan 21, 2025
- Reform Plans for IPO and Delisting Rules
- On January 21, the Financial Services Commission and related organizations including the Financial Supervisory Service (FSS), Korea Exchange (KRX), Korea Financial Investment Association (KOFIA) and Korea Capital Market Institute (KCMI) held a joint seminar on improving initial public offering (IPO) and delisting rules, as part of the governments ongoing efforts for capital market reforms. At the seminar, the FSC unveiled reform plans for IPO and delisting rules and gathered feedback from various market participants. FSC Chairman Kim Byoung Hwan delivered his congratulatory remarks outlining the background and directions of the reform plans. The Chairman said that the market structural improvement is needed to boost the overall valuation of our capital market as the government has been pushing forward capital market reform initiatives since last year. Regulatory reforms on IPO and delisting rules will be pushed forward as another major task for the value-up initiatives, he emphasized. In regard with the IPO market, Chairman Kim said that reform plans will incentivize institutional investors to hold shares for a longer period under a lock-up commitment, which will help shift the IPO market more towards investments based on corporate value. Reforms will also strengthen the roles and responsibilities of underwriters for determining appropriate IPO prices and securing mid-to-long-term investors, he added. Regarding the delisting rules, Chairman Kim explained, the authorities will strengthen the requirements for companies to remain listed and streamline delisting procedures so that companies undermining market trust can be timely removed without delay. Along with this, Chairman Kim suggested that the government will consider overhauling the stock market structure to make it more efficient and provide stronger investor protection. We will seek differentiation and linkage between market segments so that companies can raise funds in the market tailored to their growth stage
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Dec 19, 2024
- FSC and FSS Announce Measures to Ensure Market Stability and Bolster Support for the Real Economy
- The Financial Services Commission and the Financial Supervisory Service announced on December 19 a set of measures intended to ensure financial market stability and enhance the financial sectors capacity to support domestic businesses and the real economy in preparation for a potential expansion of market volatility caused by ongoing uncertainties at home and abroad. After having a series of market monitoring and industry group meetings with financial companies, the capacity enhancement measures for financial companies soundness, liquidity, and financial conditions have been drawn up well within the scope of international standards, such as the Basel III framework. First, the stress capital buffer requirement for banks that was initially set to be introduced this year will be postponed until the second half of 2025. Authorities will reexamine the exact timeline and method for introducing stress capital buffers in the first half of 2025. Second, with regard to the foreign exchange (FX) positions of banks, the non-hedgeable types of FX positions, such as investments on overseas branches that are not significantly exposed to the risk of short-term volatility in the FX market, will not be counted toward the calculation of their FX risk exposures. Third, when insurance companies make contributions to the stock market stabilization fund through purchase of the fund, the amount being calculated toward the risk exposure of their K-ICS (Korea Insurance Capital Standard) ratios will be reduced from the entire amount to half the amount. Moreover, the following measures have been prepared to lower the burden of financial companies in issuing loans and investing in domestic companies, thereby enhancing financial companies capacity to support domestic businesses and the real economy. Fourth, changes will be made to the 400 percent risk weight currently applied across the board on new technology investment funds, venture funds, and other types of investment association funds estab
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Dec 10, 2024
- FSC Chairman Holds Meeting with Foreign Financial Companies
- Chairman Kim Byoung Hwan of the Financial Services Commission met with officials from foreign financial companies on December 10 to have talks on recent political and economic situations in Korea and to assure that the Korean government has sufficient capacity to ensure stability in financial markets. At the meeting, Chairman Kim emphasized that despite increased political uncertainties, the countrys economic issues are being managed in a consistent and stable manner with the Deputy Prime Minister leading the governments economic team. Chairman Kim also said that the government has maintained a high level of preparedness for the implementation of market stabilization measures, and that key policy agendas, such as the soft-landing of the real estate project finance market, Corporate Value-up Program, and capital market reform initiatives, will continue to be pursued according to the previously set schedule. In this regard, Chairman Kim said that the government will make efforts to more closely communicate with foreign financial companies to provide adequate explanations about the ongoing situations and the governments plans. The officials from foreign financial companies attending todays meeting expressed a view that the current political situation will not significantly affect the fundamentals of the Korean economy or have negative impact on the economy on a continuing basis. They showed expectations that as long as the current political uncertainty is resolved quickly, financial markets will also return to stability in no time. However, to help ease short-term volatility in the stock market, participants also raised a view that it is necessary for institutional investors, such as pension funds, to play a more active role in the market. * Please refer to the attached PDF for details.
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Dec 10, 2024
- Plan for Promoting the Benchmark Rate Reform in 2025
- On December 10, the Financial Services Commission and the Bank of Korea held the 5th Benchmark Rate and Short-Term Financial Market Consultation with related organizations, such as the Financial Supervisory Service, the Korea Securities Depository, and the Korea Exchange, as well as academics and market experts, to discuss the Plan for Promoting Benchmark Rate Reform in 2025. Progress of Benchmark Rate Reform in 2024 The benchmark rate is an interest rate that is used to determine the value of money or financial instruments to be paid or exchanged as a result of a financial transaction. It is used to determine the profit or loss of financial transactions, evaluate investment performance, and generally represent the costof short-term financing for financial institution. In major countries, the global benchmark rate reform process, triggered by the LIBOR manipulation case in June 2012, firmly established the actual transaction-based risk-free rate (RFR) as the benchmark rate for financial transactions focusing on derivatives transactions. In 2020, Korea enacted the Act on the Management of Financial benchmarks in accordance with the recommendationsof international organizations such as the Financial Stability Board, and started calculating the Korea Overnight Financing Repo Rate (KOFR) as a critical benchmark rate in 2021. However, the efforts of the KOFR activation went slowly due to the need to prioritize financial market stability during the global liquidity reduction process that began in 2022. In 2024, the government and the Bank of Korea began discussions on revitalizing the KOFR based on stable market conditions and formed a joint public-private working group while strengthening communication with market participants. In August 2024, the government and the Bank of Korea announced the principle of transitioning to a KOFR-centered benchmark rate system. Since then, the working group has been discussing the strategy for activating KOFR and plans to implement the s
