Financial stability is a prerequisite to innovation and inclusive finance policies. FSC maintains close market monitoring for any signs of market volatility and works to ensure stability in the financial markets. There are risk factors originating from abroad and from within. FSC focuses on making our economy more resilient from external shocks, such as a disruption in the global supply chain, and supporting Korea’s material, component and equipment industries to help boost their global competitiveness. Internally, FSC is closely monitoring the trends in household debt and seeking reforms to corporate restructuring in order to prevent domestic risk factors from turning into systemic risks. Policies aimed at increasing financial stability also include enhancing fairness in the financial markets by introducing a comprehensive legal framework for the supervision of financial conglomerates, improving market discipline and promoting transparency in corporate disclosure and accounting practices.
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Oct 07, 2021
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Sep 30, 2021
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Sep 29, 2021
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Sep 28, 2021
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Sep 28, 2021
- FSC Chairman Discusses Key Policy Issues with Heads of State-backed Financial Institutions
- FSC Chairman Koh Seungbeom met with the heads of eight state-backed financial institutions on September 28 and held talks on key policy issues and the role of state-backed financial institutions. The following is a summary of Chairman Kohs remarks. (COVID-19 Crisis Management, Orderly Exit Future Preparation) Chairman Koh first talked about the need to consider an orderly normalization process and preparation for the future along with the COVID-19 crisis management measures. In this regard, Chairman Koh put forward four key policy tasks(a) provision of adequate support for vulnerable sectors, (b) management of financial imbalances aimed at maintaining stability, (c) restoration of market functions in a gradual manner and (d) enhancing the role of finance to support new growth industries. With regard to the role of state-backed financial institutions, Chairman Koh urged them to provide sufficient buffer to vulnerable sectors and work to make a transition from the current paradigm of emergency support to recovery support in the area of industrial financing. As these tasks require an accurate understanding about the situation, clear analysis about policy effects as well as future forecasts, Chairman Koh pledged to closely communicate with experts from diverse areas. (Loan Support Extension) As a first step toward an orderly exit, Chairman Koh discussed the provision of loan maturity extensions and principal and interest payment deferments, which was recently made available for six more months until March next year.In this regard, participants agreed to work on a speedy provision of support through acquisition of nonperforming loans, debt adjustment programs, as well as through liquidity provision worth KRW4 trillion. To provide a strong backstop to lower income groups, Chairman Koh urged them to continue to expand the availability of microfinance support. (Strengthening Household Debt Management Measures) In order to maintain stability in the financial system, Chairman
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Sep 27, 2021
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Sep 26, 2021
- 42 VASPs File Registration Reports with KoFIU
- FSC Chairman Koh Seungbeom held a meeting with relevant officials on September 26 to go over the registration status of virtual asset service providers (VASPs) and discuss measures to prevent damages to consumers. As the September 24 deadline has ended, 42 VASPs have filed registration reports with the Korea Financial Intelligence Unit (KoFIU). Key Details (Registration Status of VASPs) As of September 24, 42 VASPs have completed filing their registration reports, which include 29 virtual asset trading platforms (or crypto exchanges) and 13 other virtual asset-related services (e.g. virtual asset wallet or depository service providers). The KoFIU and the Financial Supervisory Service (FSS) will evaluate registration reports and decide whether to accept their registrations within three months. (Termination of Business Operation) Among 66 virtual asset trading platforms which have been in business operations, 29 entities with Information Security Management System (ISMS) certifications, which account for about 99.9 percent of the market (as of September 21, 2021), have completed submitting their registration reports. Out of the 29 trading platforms, 25 entities that have not secured partnership with banks for real-name verified accounts were found to have terminated the KRW-based trading services as they filed for registration to provide trading services in virtual assets only. Considering that those that have failed to submit their registration reports by the deadline represent less than 0.1 percent of the market, the possibility of user damages has been significantly reduced. For the remaining 37 entities (in group C and D) that have not been able to obtain ISMS certifications and thus are subject to business closure, 36 of them except for one new entrant that has yet to start operatinghave terminated their business operations. As of September 21, the total amount of deposits (in KRW) held by these unqualified entities (in group C) stood at about KRW4.18 billion, do
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Sep 23, 2021
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Sep 22, 2021
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Sep 16, 2021
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Sep 09, 2021
- FSC Chairman Holds Talks with SME and Small Merchant Groups
- FSC Chairman Koh Seungbeom met with the heads of the Korea Federation of SMEs and other relevant industry groups representing small merchants on September 9 and held talks on the coronavirus support measures. The following is a summary of Chairman Kohs remarks. The Korean economy has undergone major changes since the coronavirus outbreak began in February last year. In response to COVID-19, the government rolled out KRW175 trillion-plus stimulus programs to overcome the crisis. To support SMEs and small merchants, ultra-low rate loans and special guarantees were provided. Along this line, maturity extensions on existing loans and deferments on interest and principal payments became available through all financial sectors. Following concerns over possible credit rating downgrades and deteriorating lending conditions, the authorities urged all financial sectors to take into account individual businesses recovery prospects when assessing their credit standing for loans. Due to these measures, the liquidity risks of SMEs and small merchants have come down in large parts with improvements also shown in terms of their credit standings. The economy and financial markets now show signs of stability backed by active response from the government and efforts by businesses. However, SMEs and small merchants in contact-intensive sectors, such as restaurants, hospitality, tourism and wholesale and retail, continue to face difficult situations, especially with growing numbers of newly infected cases from July. With regard to the possibility of providing another extension on loan maturity extensions and payment deferrals, which have been extended twice for a six-month period each, the authorities will work to come up with optimal measures as soon as possible while considering the coronavirus situation, conditions of the real economy and comments from the financial sectors. * Please refer to the attached PDF for details.
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Sep 06, 2021
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Sep 03, 2021
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Aug 26, 2021
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Aug 16, 2021
- Authorities Provide Consulting to VASPs and Advise Supplementary Actions Prior to Registration
- As a follow-up to the governments plan to enhance supervision on virtual asset service providers (VASPs) and their transaction activities,the FSC and relevant institutions provided on-site consulting to the 25 VASPs between June 15 and July 16 and advised them to take supplementary measures prior to their business registration. Out of the 33 VASPs that have already obtained the ISMS certification or are in the pending status, a total of 25 entities showed interest in receiving consulting from the authorities.As such, the FSC along with other relevant institutions provided on-site consulting to the 25 VASPs to review their preparation for business registration and check the level of stability in their transactions system. Key Details (Preparation for Registration) Pursuant to the Act on Reporting and Using Specified Financial Transaction Information (the Act hereinafter), VASPs should file necessary documents for registration until September 24 and adhere to AML duties from the time of their registration. As such, VASPs should have their own internal procedures, human resources and facilities ready to implement the AML requirements at the time of registration. When consulting was provided, no VASPs were found to have met all the registration requirements, and they have shown inadequate levels of preparedness for the implementation of the AML duties and other requirements set forth by the Act. Out of the 25 VASPs, 19 entities have obtained ISMS certification, but only four VASPs were found to have their business operation with real-name verified accounts. The VASPs that have obtained ISMS certification but have no real-name accounts may still apply for business registration but for the category that is barred from offering exchange services between virtual assets and a fiat currency. With regard to the level of preparedness in adhering to the AML requirements, the lack of employees overseeing this matter and insufficient system preparation for suspicious transactions
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Aug 11, 2021
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Aug 10, 2021
- FSC Chairman Discusses Balance between COVID-19 Support and Preemptive Risk Management
- FSC Chairman Eun Sung-soo met with the heads of five financial holding groups on August 10 and held talks on creating quality jobs for young adults in financial sectors, managing household debt levels and maintaining COVID-19 financial support. (Creating Job Opportunities for Young Adults) Chairman Eun stated that a rapid transition to a digital economy may lead to diminishing job opportunities for young adults. However, the growth of fintechs is contributing to the creation of new jobs. As such, financial institutions should work to create quality jobs that are desirable for young adults, especially with this years joint job fair in financial sectors scheduled to be held in next month. (Household Debt Management) In the process of responding to the COVID-19 pandemic, a growth in private sector debt level has been unavoidable. In this regard, it is time to focus on risk management as the pace of the growth has been accelerating. In order to control the pace of growth at an appropriate level (5 to 6% for this year), the financial authorities are working on strengthening supervision. As such, financial institutions should work on preemptive management to help prevent excessive debt levels turning into potential risks for the economy and financial sectors. (COVID-19 Financial Support) Over the past year, financial institutions made available KRW204 trillionworth of financial support for SMEs and small merchants in the form of maturity extensions and payment deferrals. The authorities are closely looking at the upside and downside effects of extending these support programs and making them available for longer. In the process, the authorities will maintain close communication with financial sectors. * Please refer to the attached PDF for details.
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Aug 03, 2021
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Jul 28, 2021
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Jul 22, 2021
- KoFIU Notifies Foreign VASPs of Their Obligation to Register
- With the Act on Reporting and Using Specified Financial Transaction Information (hereinafter the Act) going into effect from March 25, 2021, all VASPs are required to register their business with the KoFIU by September 24, 2021. As such, the KoFIU has sent out a notice to 27 foreign VASPs about their obligation to register. Obligations of Foreign VASPs The Act requires VASPs to register with the KoFIU as the law equally applies to foreign VASPs that conduct activities outside Korea but have domestic consequences within Korea. Thus, if any VASPs conduct business operation targeting Koreans, they are required to register with the KoFIU and comply with requirements under the Act regarding their business operations targeting Koreans. Notice to Foreign VASPs The KoFIU has sent out a notice signed by the Commissioner of the KoFIU to 27 foreign VASPs that have business operations targeting Koreansabout their requirement under the Act to register with the KoFIU by September 24, 2021. If foreign VASPs fail to register with the KoFIU, they shall cease their business operation targeting Koreans from September 25, 2021. They are notified of the possibility of being subject to penalties as prescribed by the Act if they continue to operate without registration. Foreign VASPs that have not received any notice from the KoFIU but have business operation targeting Koreans are also required to register with the KoFIU or suspend their business operation targeting Koreans from September 25, 2021. If they continue to operate business without registration, they will be subject to up to five years of imprisonment or a maximum fine of KRW50 million as prescribed by the Act. Future Plan For foreign VASPs that continue to operate without registration beyond the September 24 deadline, the KoFIU will notify them of their illegal activities and take actions such as blocking access to their websites to inhibit their illegal business operations. The KoFIU will also bring charges against unregister
