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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Jul 15, 2021
- Vice Chairman Holds 1st Taskforce Meeting on Household Debt Management
- The FSC held the 1st taskforce meeting on household debt management chaired by Vice Chairman Doh Kyu-sang on July 15 and discussed household debt management measures for the second half of this year. The following is a summary of Vice Chairman Dohs remarks. (Key Policy Direction) For the past year and a half, the Korean economy has faced an unprecedented level of crisis triggered by the COVID-19 pandemic. In response, the financial authorities introduced support measures worth KRW175 trillion-plus. As a result, the recovery has been faster than expected. However, in the process, the level of debt in the private sector has soared with a rapid rise in household debt posing risks to the economy. In the meantime, continuing with the provision of sufficient financing support remains an important task, especially with the recent spread of COVID19 variants. The financial authorities are aiming for an appropriate balance between these two objectives while aiming to control household debt growth within 5 to 6 percent this year and about 4 percent in next year. (Household Debt in H1 2021) Household debt in the first half of this year rose KRW63.3 trillion, or about KRW10.6 trillion a month. Compared to the same period from the previous year (up KRW6.1 trillion), the pace of growth has accelerated, but it has slowed down compared to the second half of last year (up KRW12.6 trillion). The household debt growth remained at about the same level in the banking sector but expanded in the non-banking sector. Given a higher rate of housing market transactions, there are growing risks in the non-banking sector. (Household Debt Management Plan for H2 2021) In order to meet the goal of containing the growth of household debt within the 5 to 6 percent level, the financial authorities will work to ensure effective implementation of the household debt management measures, such as a gradual expansion of the application of DSR on individual borrowers. In the fourth quarter, the authorities w
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Jul 14, 2021
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Jul 13, 2021
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Jul 13, 2021
- FSC Identifies D-SIBs for 2022
- The FSC identified five bank holding companies (BHCs) and five banks as domestic systemically important banks (D-SIBs) for 2022 on July 13: Shinhan Financial Group, KB Financial Group, Hana Financial Group, Woori Financial Group, NH Financial Group, Shinhan Bank, KB Kookmin Bank, Woori Bank, KEB Hana Bank and NH Bank. Those identified as D-SIBs are required to set aside an additional common equity capital of 1%, and the higher loss absorbency requirement will take effect on January 1, 2022. The FSC will identify D-SIBs every year in accordance with assessment criteria recommended by the Basel Committee on Banking Supervision (BCBS). In addition, the FSC identified D-SIBs as domestic systemically important financial institutions (D-SIFIs) under the amended Act on the Structural Improvement of the Financial Industry. D-SIFIs are required to prepare and submit their own recovery plans to the Financial Supervisory Service (FSS) within three months from the day of being designated as a D-SIFI. * Please refer to the attached PDF for details.
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Jul 02, 2021
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Jun 30, 2021
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Jun 25, 2021
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Jun 24, 2021
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Jun 23, 2021
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Jun 22, 2021
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Jun 17, 2021
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Jun 16, 2021
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Jun 15, 2021
- Multiple Subscriptions Restricted for IPO Shares
- The government approved the revisions to the Enforcement Decree of the Financial Investment Services and Capital Markets Act during a cabinet meeting held on June 15. The revisions (a) restrict retail investors from applying for multiple subscriptions for IPO shares, (b) increase the annual cap for issuing securities via crowdfunding and (c) introduce specific rules for financial investment companies credit extension to overseas branches. The revisions will go into effect from June 30, 2021, except for the provision on the restriction of multiple IPO subscriptions, which will begin to apply for securities reports being filed after June 20, 2021. (Restricting Multiple Subscriptions for IPO Shares) With the introduction of a more equitable share allocation method in last December, retail investors are given more opportunities for IPO share subscription. However, in IPOs with multiple lead managers, multiple subscriptions were made possible as retail investors could open up accounts at multiple brokerage firms and apply at each brokerage firm. This resulted in inconvenience for investors and heavy workload for brokers. As such, multiple subscriptions for IPO shares will be banned for retail investors. Brokerage firms will be required to check whether investors have applied for share subscriptions at other brokerage firms. Even when an investor applies for multiple subscriptions, share allocation will be made only on the first subscription. (Follow-up Measures to Promote Crowdfunding) The annual cap for issuing securities through crowdfunding will be increased from KRW1.5 billion to KRW3 billion. The authorities will strengthen supervision over the financial soundness of crowdfunding platforms by checking their capital requirement more frequently from once a year to once every month and shortening the grace period before withdrawal from one year to six months. (Financial Investment Companies Overseas Operation) Financial investment companies can extend credit to oversea
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Jun 09, 2021
- KoFIU and Probing Institutions to Strengthen Monitoring and Inspection on AML Duties of VASPs
- The Korea Financial Intelligence Unit held a meeting with eleven institutions tasked with probing virtual asset service providers for their AML requirements on June 9.At the meeting, the KoFIU and relevant institutions discussed ways to bolster inspection of VASPs use of fake and false name bank accounts and to strengthen AML supervision over financial institutions. (Strengthen Monitoring of Fraudulent Bank Accounts) As VASPs are required to register with real name bank accounts by September 24 this year, their use of fictitious bank accounts has become more prevalent. As local banks have begun to more tightly restrict VASPs from opening up new accounts for collection of money, the use of accounts opened at mutual finance firms and other small-scale financial firms has also increased. As such, the authorities will strengthen monitoring of fraudulent and inappropriate use of bank accounts by VASPs. Financial transactions through fraudulent and fictitious bank accounts will result in rejection of transactions and termination of accounts. In this regard, the authorities will also strengthen monitoring of suspicious account activities. (Conduct Comprehensive Inspections on Fraudulent Accounts) The relevant institutions will carry out comprehensive inspections on the fraudulent accounts operated by VASPs between June and September. In the future, the status on the use of fraudulent accounts by VASPs will be analyzed monthly and shared with relevant institutions. (Enhance Monitoring of VASPs) As the deadline is approaching for VASPs to register their business with the authority, there exists a greater risk of business closure. As such, the authorities will enhance monitoring of VASPs operating accounts as well as accounts used for collecting deposits. (Strengthen AML Supervision) The authorities will strengthen AML supervision and inspection over financial institutions in order to prevent fraudulent activities, such as inappropriate lending, embezzlement of funds, illicit
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Jun 03, 2021
- FSC Announces Analysis on Stock Markets with Partial Resumption of Short Selling
- With the partial resumption of short selling being in place for about a month, the FSC announced an analysis on stock market trends for the period of May 3 to June 2. During this period, stock prices moved in a similar pattern as global stock markets while domestic stock prices showed relatively stable movements compared to other markets. Although the average daily amount of short selling transactions rose somewhat, it appears that there exists no significant relationship between short selling and stock prices for the given period. The FSC and other relevant institutions will continue to closely monitor market trends while working to bring about transparency and fairness in the markets. Stock Market Trends As of June 2, KOSPI and KOSDAQs closing prices were up 2.4 percent and down 0.2 percent, respectively, compared to April 30, the last trading day before the partial resumption of short selling began. In May, global stock prices showed mixed trends with the possibility of tapering by the Fed amid price increases in the U.S. Asian stock markets moved in the same direction as global stocks while domestic stock markets showed relatively stable trends as corporate earnings improved and retail investors remained net buyers. In May, foreigners net sold KRW9 trillion but turned to net buying in the last week of the month. Due to concerns about a monetary tightening from the U.S., other Asian markets also experienced foreign outflows. Short Selling Trends During the one-month period from May 3 to June 2, the average daily amount of short selling transactions increased somewhat to KRW688.2 billion. However, considering the fact that the total transaction amount increased more than twice the level seen before the partial resumption of short selling began, the growth is not that considerable.Also, as the built-up demand for short selling begins to fade out, the growth in the amount of short selling transactions also shows a downward trend toward stability. During the one-mont
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Jun 02, 2021
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May 29, 2021
- FSC Chairman Delivers Opening Remarks at the Green Finance Special Session of P4G Seoul Summit
- FSC Chairman Eun Sung-soo delivered opening remarks at the special session on green finance held on May 29. Please see below for the full text of the speech. I. Introduction Good evening, everyone. Good afternoon, Europe. Good morning, America. Welcome to the 2021 P4G Seoul Summit Special Session on Green Finance. The world is still in the midst of the Covid-19 crisis. Covid-19 is not an individuals problem, nor a regions or a countrys problem. It is the whole humanitys problem. Likewise, climate change is everyones problem. In this regard, P4G puts emphasis on the value of partnerships across all sectors. I hope P4G Seoul Summit can induce everyone to take part in climate action. II. Why Green Finance? Achieving carbon neutrality involves a fundamental restructuring of industry. This might require trillions of dollars across the world. Many countries including Korea, have announced large-scale fiscal stimulus under Green New Deal schemes. However, public finance alone cannot cover the scale of investment we need. MDBs and private sector investors need to get involved as well. In a different angle, the financial industry can induce companies to lessen their environmental impact by altering the lending or investing criteria. For example, BlackRock, the worlds largest asset manager, evaluates a companys ESG performance when making an investment decision. III. Progress of Green Finance Green finance has been rapidly taking root in the global financial market over the past years. By the end of 2020, around 3,000 institutional investors have joined the UN Principles for Responsible Investment. Globally, ESG fund assets are nearing $2 trillion. Also, quarterly issuance of green bonds has risen to $150 billion. South Korea is also actively stepping up efforts to promote green finance. Last year, the government pledged to double the share of funding for green projects in public financial institutions by 2030. We are also planning to gradually make ESG data disclosures manda
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May 28, 2021
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May 27, 2021
- FSC to Host Special Session on Green Finance at the 2021 P4G Seoul Summit
- The FSC will host a green future session on the topic of green finance at the 2021 P4G Seoul Summit at Dongdaemun Design Plaza on Saturday, May 29, from 20:00 to 22:00 (Korean Standard Time). The special session on green finance will be available for online live streaming for anyone who is interested in watching via official websites of the 2021 P4G Seoul Summit, FSC and their YouTube channels. The special session will feature discussions on the role of finance in fostering green recovery in the post-COVID-19 era. Speakers and panelists will include foreign dignitaries and experts from climate and finance-related international organizations and institutions, such as the UNFCCC, WEF, IFC, BIS, EIB, TCFD, GCF, GGGI and SP. FSC Chairman Eun Sung-soo will deliver opening remarks through which he will offer an outlook on the future tasks of global green finance efforts while calling for close cooperation from financial sectors across the globe to achieve carbon neutrality. In particular, Chairman Eun will introduce Koreas green finance policies that have been actively pursued by the government as it announced the 2050 carbon net zero goal last year. The special session on green finance will shed a new light on the important role of finance in responding to climate change. It will also help raise domestic financial sectors interest and participation in green finance efforts. For more details about the program, please see the attached reference material. * Please refer to the attached PDF for details.
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May 25, 2021
- Government to Work on Improving Financial Consumer Education
- Vice Chairman Doh Kyu-sang presided over the 1st consultative body meeting on financial education virtually held on May 25. The consultative body, which had been operated on a voluntary basis from 2007 to 2020, turned into a statutory organization with the enactment of the Financial Consumer Protection Act taking effect from March 25, 2021. At its first meeting, chaired by FSC Vice Chairman, the consultative body discussed and approved basic principles for improving financial consumer education and detailed plans. Key Discussions (Operation of the Consultative Body) Under the Act, the consultative body is composed of government officials from eight relevant ministries and deputy governor of the FSS. However, it will be attended by private sector experts from consumer groups, research and education institutions. The consultative body will hold its regular meeting bi-annually in June and December. It may hold irregular meetings, if needed. (Financial Education Plan for 2021) The government will strengthen online education infrastructure and programs to ensure the uninterrupted financial education under the Covid-19 circumstances. Relevant institutions will work together to develop effective and creative materials to boost public awareness of the Financial Consumer Protection Act. (Role Assignment among Financial Education Institutions) Financial consumers are categorized into groups according to their lifecycle and specific circumstances, For each group, a responsible education institution will be assigned. Responsible institutions will be asked to submit evaluation reports and plans on financial education for each group to the consultative body in December every year. (Certificate for Educational Content) Financial education institutions will jointly review education content on the basis of its appropriateness, accuracy, delivery and fairness. Qualified content will be granted a certificate, which is subject to reassessment every one or three years. (Certificate for
