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Aug 19, 2022
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Aug 18, 2022
- KoFIU Cautions Virtual Asset Users against Unregistered Virtual Asset Service Providers
- The Korea Financial Intelligence Unit (KoFIU) announced on August 18 that it has notified illegal business activities of 16 unregistered Virtual Asset Service Providers (VASPs) to the investigative authority. The KOFIU urged virtual asset users to practice extra caution in order to avoid incurring damages that may result from their transactions with unregistered VASPs. I. Unregistered Operation of Foreign-based VASPs in Domestic Market The KoFIU has notified the investigative authority about the violation of unregistered business activities of 16 foreign-based VASPs* carrying out business activities intended for domestic consumers pursuant to the Act on Reporting and Using Specified Financial Transaction Information (the Act hereinafter). * KuCoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, CoinW, CoinEX, AAX, ZoomEX, Poloniex, BTCEX, BTCC, DigiFinex, Pionex The 16 foreign-based VASPs were found to have been engaged in business activities targeting domestic consumers by offering Korean-language websites, having promotional events targeting Korean consumers and providing a payment option that supportsthe purchase of virtual assets using credit cards. On July 22, 2021, the KoFIU notified foreign-based VASPs that have business operations targeting Koreans about their obligation to registertheir business with the authority pursuant to the Act. However, the 16 aforementioned entities were found to have business operations targeting Koreans without obtaining a registration and thus the authorities plan to take necessary measures. II. Actions Taken on Unregistered VASPs a) The KoFIU has notified the investigative authority about the violation of registration duties (under the Act) of 16 unregistered VASPs, and plans to inform FIUs in their respective countries about their violation. For illegal business activities of unregistered entities, maximum 5 years of imprisonment or up to KRW50 million of fine can be imposed with a restrictionfor registering as a VASP in dome
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Aug 17, 2022
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Aug 11, 2022
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Aug 10, 2022
- Household Loans, July 2022
- In July 2022, the outstanding balance of household loansacross all financial sectors fell KRW1.0 trillion, showing a stable trend as the growth seen in Q2 turned back lower.The financial authorities will make efforts for a stable management of the household debt growth while working on effective implementation of the normalization of household loan regulations to help alleviate financing difficulties of non-speculative homebuyers. (Overall) Household loans across all financial sectors dropped KRW1.0 trillion in July 2022. The growth rate (up 1.7%, y-o-y) has continued to stay on a downward path since the second half of 2021. (By Type) Mortgage loans expanded at a slower pace than the previous month and other types of loans dropped at a greater level, contributing to the overall decline in household loans. - (Mortgage Loans) Mortgage-backed loans rose KRW2.5 trillion in July, slowing down from KRW2.8 trillion in the previous month. - (Other Types of Loans) Other types of loans dropped KRW3.6 trillion in July, falling at a faster rate compared with the previous month (down KRW2.1 trillion). (By Sector) Household loans in both the banking and non-banking sectors turned lower, but the growth trend continued in the savings bank (up KRW0.4 trillion) and insurance (up KRW0.2 trillion) sectors. - (Banking Sector) Banks saw a drop of KRW0.3 trillion in household loans. Mortgage loans from banks grew KRW2.0 trillion,rising from KRW1.4 trillion a month ago, as group lending for new apartment subscription and jeonse loans rose KRW1.3 trillion and KRW1.1 trillion, respectively. Other types of loans fell KRW2.2 trillion, declining at a faster rate from a month ago (down KRW1.2 trillion) as credit loans fell KRW1.9 trillion. -(Non-Banking Sector) In July, nonbanks saw a drop of KRW0.8 trillion in household loans, led by declines in the mutual finance (down KRW1.2 trillion) and specialized credit finance (down KRW0.2 trillion) sectors. (Assessment) Household loans across all financ
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Aug 08, 2022
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Aug 04, 2022
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Aug 03, 2022
- FSC Announces Measures to Strengthen Financial Support for Business Transformation
- The FSC unveiled a plan to provide financial support in the amount of about KRW1 trillion to companies pursuing business transformation to cope with changing digital and environmental conditions in order to help domestic companies regain their competitiveness edge and expand their business areas. Background In the process of responding to the COVID-19 pandemic, the rapidly changing business conditions such as digital transformation and carbon net zero movement have necessitated businesses to make changes at a greater level. Considering a slowdown in the level of business productivity, it has become necessary for companies to proactively seek structural transformation of their business in order to enhance the level of competitiveness. Measures to Support Business Transformation Currently, the Ministry of Trade, Industry and Energy (MOTIE)s standards for approving business transformation activities and the evaluation standards used by financial institutions remain different, so that it has been difficult to provide financing support to those that have been approved by MOTIE. Therefore, authorities will strengthen the pre-selection process to ensure that businesses that are eligible to receive financial assistance are selected as the entities pursuing business transformation by introducing a two-staged evaluation process (evaluation of disqualification criteria and evaluation of technological prowess). a) The business transformation support center will examinethe financial conditions of applicants and determine whether there are any reasons for disqualification. b) A technology credit bureau (TCB) will examine and determine the technological prowess and the viability of business model for those that have passed the evaluation of disqualification criteria. Through TCBs technology appraisal,the feasibility of new business model will be evaluated such as the potential for expanding sales, operating profit, etc., and the capability for capital expansion will be evaluated b
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Jul 28, 2022
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Jul 26, 2022
- FSC Announces Plan to Introduce Insolvency Resolution Mechanism for Financial Institutions
- The FSC announced a plan to introduce an insolvency resolution mechanism for financial institutions (tentatively called financial stability account) to help prevent insolvency of financial institutions. The plan was discussed at the financial risk response taskforce meeting held on July 26. With changes in financial market environment, there have been calls for introducing a mechanism that can help protect financial institutions against insolvency and prevent risks from spreading in advance. In the wake of the 2008 global financial crisis, major economies such as the U.S., EU and Japan established such preventive support systems. In this regard, the FSC is considering ways to introduce an insolvency resolution mechanism for financial institutions (tentatively called financial stability account)for insolvency prevention of financial institutions through liquidity provision and capital expansion. The FSC will prepare a detailed plan after coordinating with relevant ministries and institutions and gathering opinions from experts and seek revision to the Depositor Protection Act accordingly. Background With some of the changes taking place in the financial industry such as the growth of the nonbank sector, deepening interconnectedness between financial sectors and unpredictability in shock originating from the real economy sector, there is growing concern about risks in certain areas spreading across the entire financial system. Therefore, through provision of liquidity injection and capital expansion to the financial sector facing temporary distress amid a crisis situation, it is necessary to keep the cost of maintaining stability in the financial system to a minimum levelby preventing insolvency of financial institutions as well as spread of risks. Major economies such as the U.S., Japan and EU had already set up relevant systems to prevent systemic risks and minimize the cost of insolvency resolution in the wake of the 2008 global financial crisis. On the contrary, t
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Jul 25, 2022
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Jul 22, 2022
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Jul 19, 2022
- FSC Holds Kick-off Meeting on Financial Regulatory Reforms
- The FSC launched a financial regulatory reform committee, composed of 17 private sector participants with expertise in economics, finance, digital, law, and media sectors, to push forward financial regulatory reform initiatives through a private-public cooperation. At its kick-off meetingheld on July 19, the committee appointed Bahk Byung-won, former honorary chairman of the Korea Enterprises Federation (KEF), as committee chairman and discussed directions for financial regulatory reforms. Summary of FSC Chairmans Opening Remarks In his opening remarks, FSC Chairman Kim Joo-hyun emphasized the need for financial regulatory reforms in response to the reshaping of the financial sector and technological changes caused by digital transformation and a blurring of the barriers across sectors (called a Big blur phenomenon). In order for the financial sector to play a key role in economic growth as an independent industry, Chairman Kim called for bold reforms of financial regulations. The financial regulatory reforms, he said, are aimed at creating a new playing field to produce a success story, like a globally-renowned K-pop group BTS, in Koreas finance, in which new players originating from Koreas financial sector would be leading global markets. With financial regulatory reforms, the government will (a) support financial companies, regardless of whether they are online or offline businesses, to grow into global players; (b) create an environment to promote digital innovation for both financial companies and big tech; and (c) allow domestic financial companies to enter businesses, in which global financial companies are allowed to operate. All existing regulations will be reexamined on a clean slate. Chairman Kim stressed the importance of working together principle with various stakeholders from different sectors including industries, academics and media, and asked the financial regulatory reform committee to examine and discuss financial regulatory reform proposals from
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Jul 14, 2022
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Jul 13, 2022
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Jul 12, 2022
- Household Loans, June 2022
- The outstanding balance of household loansacross all financial sectors rose KRW0.7 trillion in June 2022 with the pace of growth falling from the previous month (up KRW1.7 trillion).The trends in household loan continue to be on a stable path as the statistics for all financial sectors in H1 2022 fell (down KRW0.8 trillion) for the first time since the half-year statistics first became available in 2015.The financial authorities will continue to make efforts for a soft-landing of the household debt issue as there are possibilities of growing burdens on borrowers and risks to financial companies due to interest rate hikes. (Overall) Household loans in June 2022 increased KRW0.7 trillion across all financial sectors. The growth rate (up 2.7%, y-o-y), which fell back lower from a slight increase seen in the previous month, continued to stay on a downward path since the second half of 2021. (By Type) Mortgage loans grew at a faster rate compared with the previous month, but other types of loans dropped considerably to bring down the overall household loan growth level. - (Mortgage Loans) Mortgage-backed loans rose KRW2.8 trillion in June, growing at a faster rate from the previous month (up KRW1.5 trillion) due to brisk lending by banks and the mutual finance sector. - (Other Types of Loans) Other types of loans dropped KRW2.1 trillion in June, edging back lower from a temporary hike in the previous month as credit loans and non-housing collateral lending declined. (By Sector) Household loans in both the banking and non-banking sectors saw a slowdown in the growth level, but the downward trend seen throughout this year in the mutual finance sector has turned upward. -(Banking Sector) Banks saw an increase of KRW0.2 trillion in household loans, declining slightly from the previous month (up KRW0.3 trillion). Mortgage loans from banks rose KRW1.4 trillion,growing at a faster rate compared with the previous month (up KRW0.8 trillion), as jeonse loans (up KRW0.9 trillion) a
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Jul 07, 2022
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Jul 06, 2022
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Jul 04, 2022
- FSC and FSS Decide to Implement Measures to Mitigate Stock Market Volatility
- In response to a recent increase in stock market volatility, the financial authorities held a market monitoring meeting on July 1 and decided to take measures to mitigate market volatility. (a) Requirement for securities firms to maintain a certain level of collateral ratio on their credit loans will be exempted for three months starting from July 4, which may be extended if needed. (b) Caps on the amount of daily buy orders for acquisition of treasury stocks by listed companies will be eased for three months starting from July 7, which may be extended if needed. (c) The FSS and KRX will jointly conduct a special inspection on short-selling practices. Financial authorities will continue to monitor financial market conditions, holding a joint market monitoring meeting on a weekly basis, and consider or implement market volatility mitigation measures, if needed, in accordance with contingency plans. Background With the KOSPI falling below 2,300 points during intraday trading on July 1, Koreas stock market has shown continued and increasing volatilityon concerns over rising interest rates, expanding inflation, possibility of a global economic recession, etc. Although increased stock market volatility will be inevitable for a while, given macroeconomic conditions at home and abroad, it is necessary to stay alert about the spread of excessive market anxieties. Measures To Mitigate Stock Market Volatility The FSC and FSS held a joint market monitoring meeting with relevant securities institutionschaired by FSC Vice Chairman Kim So-young to examine financial market conditions after the market closing on July 1, and decided to implement the following measures to mitigate market volatility. (a) For three months from July 4 to September 30, which may be extended if needed, securities firms will be exempted from a requirementto maintain a certain level of collateral ratios on their credit loans in order to ease concerns about a surge in forced liquidation with declining stock
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Jun 29, 2022
- One-stop Lost Credit Card Reporting Service Available from Account Info Mobile App from June 29
- The FSC announced the availability of the one-stop integrated lost credit card reporting service from a mobile application called Account Info from June 29 through which financial consumers using credit cards from different issuers can simply access the app to submit lost reports at once. Background Along with the Credit Finance Association and the payment card industry, the FSC has been operating a one-stop integrated lost credit card reporting service to protect card users.As of now, the one-stop integrated lost credit card reporting service is available at credit card companies through their mobile apps or websites, and the total number of lost card reports reached some two million until the end of December 2021. To help accommodate such wide usage of the one-stop integrated lost credit card reporting service and to improve service access and convenience for financial consumers, the authorities have been working to expand the availability of one-stop integrated lost credit card reporting service to the Account Info mobile app. Key Details From June 29, the one-stop integrated lost credit card reporting service is available on the Account Info mobile app. Within the Account Info mobile appthat provides one-stop integrated search and management of a users all financial account and card information, a new One-stop Lost Card Report function will be added under the menu My cards at a glance. On the Account Info app, users can (a) check which cards they are currently using, (b) choose the cards they want to report as being lost and (c) submit a lost report. With the reduction in time and process for submitting lost reports, it is expected that this service will improve consumer convenience and help lower the amount of damages resulting from lost or stolen cards. Lost reports for credit, debit or family cards issued under the same name as the person filing the lost report can use this service (corporate cards excluded) and this service can be used from overseas as well.
