FSC works to ensure that finance plays a key role in developing innovative businesses and supporting the real economy, thereby fueling Korea’s more vibrant economic growth. Promoting advanced financial industry, stable financial markets, fair market order and reliable consumer protection are among FSC’s key policy agenda. Digital transformation and big data are increasingly playing larger roles in various aspects of financial services. In the era of 4th industrial revolution and digital economy, finance will help boost growth potential and create jobs as the government seeks to advance its Digital New Deal policy.
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Aug 08, 2022
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Jun 17, 2022
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May 31, 2022
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Jan 25, 2022
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Dec 22, 2021
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Dec 20, 2021
- Financial Development Review Committee Holds Meeting to Discuss 2022 Policy Agenda
- The Financial Development Review Committee held a meeting on December 17 to discuss key policy initiatives for 2022 and review current trends and risks in the financial markets. In a keynote address, FSC Chairman Koh Seungbeom said that the governments financial policy for 2022 will be centered on ensuring stability in the financial system, promoting financial development, supporting an overall economic growth and expanding financial inclusion. The following is a summary of Chairman Kohs remarks. Chairmans Remarks Despite overall expectations for a sustained recovery momentum into the next year, there still exist uncertainties regarding domestic economic and financial market conditions. With the global tapering move, market instability may grow. As such, the FSC plans to preemptively tackle financial imbalances to maintain stability in the financial system. To this end, the FSC will work on a steady implementation of the household debt management measures and an orderly exit and normalization from the pandemic-era policy measures while closely examining and managing the vulnerable and the so-called shadow banking sector. In terms of promoting financial development, the FSC will maintain a well-balanced approach between promoting innovation and competition between traditional financial institutions and new players such as big tech and fintech companies and working on consumer protection. In the midst of important structural changes taking place in the economy and industries to achieve carbon net zero goals and make digital transformations, the financial sector should provide active support for businesses attempting to reorganize, searching for new growth areas and making transitions to lower carbon growth models. As the current economic condition demands an ever stronger measure for financial inclusion, the FSC will work to ensure a steady access to financial support for vulnerable groups including credit recovery while seeking improvements to consumer safeguards. Du
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Dec 20, 2021
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Dec 06, 2021
- FSC Chairman Discusses Key Policy Tasks for 2022 in Virtual Press Briefing
- FSC Chairman Koh Seungbeom held an end-of-year press briefing in a virtual format on December 3 to discuss policy outcomes for this year and explain key policy tasks for 2022. At the beginning of his keynote address, Chairman Koh touched upon some of the important policy initiatives and their outcomes for 2021, including policies on household debt management, COVID-19 financial support for small merchants and SMEs, virtual asset service providers, digital transformation in the financial sector and financial consumer protection. Chairman Koh then discussed key policy tasks for 2022 as summarized below. Chairmans Remarks on 2022 Policy Focus The global economy is expected to maintain its recovery momentum in 2022 but market uncertainties are growing due to asset price volatility, rising prices and persistent concerns about inflation. Domestic situations are also concerning. Financial imbalances and potential risks need to be managed while the provision of pandemic-related supports should be maintained. Excessive debt levels should be reduced while assistance for the lower income and vulnerable groups should continue to be available. Ensuring stability in the financial system and pursuing inclusive financial policies may be contradictory in nature but seeking a proper balance between the two is the task of the financial authority. In this regard, the FSC will focus on the following three policy areas. First, the authorities will continue to work on tackling financial imbalances. Unlike some of the other major economies where debt levels have increased much more in the public sector, Korea has seen debt levels grow much faster in the household and corporate sectors. The household debt management plan for 2022 will be focused on managing the total amount of debt extended with a longer term plan for gradually introducing a more systematic management plan. With the application of the individual borrower-level debt service ratios (DSRs), stable management of household debt
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Sep 09, 2021
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May 24, 2021
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Mar 02, 2021
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Feb 15, 2021
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Feb 08, 2021
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Feb 03, 2021
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Feb 01, 2021
- Securities Firms to Play Bigger Role in Corporate Financing and Venture Capital Market
- The FSC decided on the measures to promote the role of securities firms in corporate financing and venture capital market on January 29. Background To help our economy continue to search for sustainable growth areas and create quality jobs, an innovation-based development is necessary. Amid an acceleration of digital transition and the spread of contactless services, promoting new industries based on technology and intangible assets, such as IT and bio health, should take place. The government has worked on regulatory improvements to boost the role of securities firms in corporate financing.As such, the number of securities firms with equity capital of KRW3 trillion or more increased from five in 2013 to eight in 2019, and their high value-added services such as investment banking has expanded. However, the securities firms role in providing venture capital to innovative SMEs has been lagging. Instead, offering investor credit exposure and providing debt guarantee on real estate project financing took up most of their business. As such, the following measures are intended to promote the securities firms role in providing venture capital to innovative SMEs. Key Measures A. Re-establishing the Role of Comprehensive Financial Investment Businesses Under the current system of comprehensive financial investment business entities, the total credit exposure offered to businesses rose from KRW0.4 trillion in 2013 to KRW14.3 trillion at the end of June 2020. Business loans to SMEs has taken up 51.7 percent (or KRW7.4 trillion), which indicates a significant rise. However, out of KRW7.4 trillion, SME loans excluding SPCs and real estate project financing stood at just KRW0.3 trillion, representing only 2.0 percent of the total credit exposure to businesses. As such, adjustments will be made to the rules on comprehensive financial investment business entities capital exposure limits to remove real estate-related credit offering from the currently allowed special capital exposu
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Feb 01, 2021
- FSC Announces Plans to Improve Competitiveness of Publicly Traded Funds
- The FSC unveiled specific plans to improve the competitiveness of the publicly traded fund market on January 29, with an aim to make the sales and management process more investor-oriented. The plans include (a) increasing the accountability and efficiency of fund management, (b) making the sales process more investor-oriented, (c) encouraging the introduction of diverse types of funds and (d) strengthening support for investors. BACKGROUND Publicly traded funds serve as an importance source of asset management for the general public, allowing small-sum investment and fit for medium risk/medium return appetite. They are also important as they provide capital to productive sectors and help to spread out the real estate-oriented household asset structure. However, the volume of publicly traded funds has stagnated recently as retail investors have become less inclined to invest in publicly traded funds due to the availability of private equity funds, equity-linked securities and other competitive products as well as the relatively low returns, cost burdens related to sellers compensations and fees, inappropriate fund management practices, etc. Meanwhile, amid a low interest rate environment and abundant market liquidity, the general publics interest in financial investment has grown, particularly in direct investing. Over the past 10 years, the volume of private equity funds grew 268.3 percent while that of publicly traded funds rose only 38.3 percent. Stock funds except exchange-traded funds (ETFs) fell 53.2 percent while ETFs and money market funds (MMFs) rose 759.0 percent and 57.3 percent, respectively. The stagnant development of the publicly traded fund market can be attributable to (a) the subpar performance of fund management in generating returns, (b) the declining trust on fund sellers, (c) the lack of diversification in the types of funds and (d) the lack of adequate support for investors. Against this backdrop, the authorities will seek following strategies
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Jan 28, 2021
- FSC Announces Specific Plans for Financial Innovation and Digital Finance
- The FSC announced a detailed work plan for financial innovation and digital finance on January 28, which aims to spur the growth of fintechs, promote the spread of online-based financial services and build financial infrastructures necessary for digital innovation. Background The government has been working to promote digital finance and innovation in financial services through a variety of policies. The Special Act on Support for Financial Innovation went into effect in April 2019, which introduced a financial regulatory sandbox program. The Fintech Center Korea was established in January 2018 to provide comprehensive support for fintech startups. In an effort to promote a digital transformation in the financial industry, the fintech investment guidelines were introduced in October 2019 and more innovative types of businesses such as MyPayment came into being. In December 2019, open banking service was introduced, and in January 2020, the revisions to the Credit Information Use and Protection Act were finalized which will promote the use of data and the growth of MyData industry. In order to strengthen data security and ensure safety in payment systems, enhanced security measures were introduced in the wake of the COVID-19 pandemic. Against this backdrop, the FSC will work on the following to further promote innovation and digital transformation in the financial industry. Key Policy Tasks A. Advancement of Fintech Industry (1) Introduce a digital sandbox through which fintech startups can have opportunities to virtually test their new business ideas (from Jun-Aug 2021) (2) Establish a comprehensive fintech support system by working on a legislation focused on nurturing fintechs (within 2021), further improving the management of the regulatory sandbox program (Jan 2021) and expanding financial support through state-backed financial institutions and private sector investments (Q1 2021) (3) Work to boost the organizational capabilities of the relevant divisions and ag
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Jan 19, 2021
- FSC Announces 2021 Work Plan
- The FSC unveiled its work plan for 2021 on January 18, highlighting the four areas of policy tasks as follows(a) maintaining the COVID-19 financial support and managing potential risks, (b) supporting K-New Deal initiatives for a green and digital economy, (c) promoting financial innovation and digital finance and (d) strengthening financial consumer protection and support for vulnerable groups. KEY ACHIEVEMENTS IN 2017-2020 A. STEADY MAINTENANCE OF FINANCIAL STABILITY AMID COVID-19 PANDEMIC Over the past four years, the FSC has focused on maintaining stability in the financial system as its utmost policy priority. In the wake of the COVID-19 pandemic, the FSC responded by quickly drawing up and providing financial support packages worth KRW175 trillion-plus and worked to prevent the crisis from spreading further into the financial markets. B. SUCCESSFUL CHANNELING OF FUNDS TO PRODUCTIVE SECTORS The FSC has worked to expand the supply of capital into more productive sectors by introducing innovative ways to assess corporate credit and through revisions to the relevant capital markets rules. In addition, the public sector has provided equity-based funding sources via growth ladder fund and other government-backed financing channels. C. ACTIVE PROMOTION OF COMPETITION AND INNOVATION IN FINANCIAL INDUSTRY The FSC has granted new business licenses to internet-only banks, insurance firms and real estate trust companies based on an industry-level competition assessment. In order to promote and expand financial innovation, the FSC has also worked to establish the necessary infrastructures, including the regulatory sandbox, open banking and MyData in financial services. D. ENHANCED INCLUSIVENESS VIA MICROFINANCE SUPPORT AND CONSUMER PROTECTION The FSC has worked to reduce the interest payment burdens of lower income households by lowering the maximum interest rate that can be charged on loans from 24% to 20%. E. IMPROVED FAIRNESS BASED ON RULES AND PRINCIPLES The FSC has al
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Dec 23, 2020
- Government Unveils Plans for K-New Deal Fund
- The government announced its plans for the K-New Deal fund at the 23rd Meeting of the Central Economic Response Headquarters held on December 23.PUBLIC SECTOR-LED NEW DEAL FUNDFrom 2021 to 2025, the government aims to raise a total of KRW20 trillion public sector-led New Deal fund through matching investments from the private sector. The public sector funds in the amount of KRW7 trillion will be invested in the fund over the next five years, which will pump-prime private sector investments in the amount of KRW13 trillion.In 2021, the government aims to launch and operate a New Deal fund in the amount of up to KRW4 trillion, thirty-five percent of which will be funded by the public sector including fiscal spending of KRW510 billion and investments from the Korea Development Bank and Korea Growth Ladder Fund. The remaining portion of the fund will be financed with private sector investments from both institutional and retail investors. Retail investors will be allowed to invest via public offerings of privately placed funds, which will make up about five percent of the total private sector investments.INVESTMENT ALLOCATION PLANThe public sector-led New Deal fund in 2021 will be allocated according to policy priorities and the purpose of the investments. First, fund allocation will be based on a bottom-up approach, reflecting investment proposals from the private sector. The investment will be focused on six major New Deal sectors—data, network and artificial intelligence (DNA) sectors, future car green mobility sectors, eco-friendly green industries, New Deal services, SOC digital logistics and smart manufacturing smart farming sectors.At the same time, the fund will invest in New Deal sector businesses for their New Deal related projects on MAs, acquisition of technologies, RD, facility investment and business transformation projects. The proportion of investments on New Deal businesses will make up about seventy to ninety percent with about ten to thirty percent o
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Dec 14, 2020
- FSC Chairman Holds Press Briefing and Discusses Policy Outline for Next Year
- FSC Chairman Eun Sung-soo held a virtual press briefing on December 14 and discussed key policy plans for the next year.The following is a summary of Chairman Eun’s remarks.(LOOKING BACK TO 2020) In the wake of the pandemic declaration earlier this year, financial markets fell into turmoil temporarily. Contractions in economic activities put extra burdens on small merchants and self-employed business owners. Then, the KRW175 trillion-plus emergency support programs were introduced by the government to respond to the situation in a prompt and preemptive manner. As a result, the OECD forecast Korea’s 2020 economic growth to be the first among its member economies. In recent weeks, KOSPI has been setting record highs as well.This successful market turnaround was made possible due to the effectiveness of K-quarantine and economic response measures on top of strong corporate earnings performance. While focusing our attention on the COVID-19 crisis management, the FSC has also worked on financial innovation, consumer protection and fair economy measures this year. The revision to the Credit Information Use and Protection Act built foundations to develop data industry. The consultative body meetings on digital finance have focused on establishing an environment for fair competition between financial companies, fintechs and big techs. The Financial Consumer Protection Act is scheduled to go into effect next year and the newly passed legislation on the supervision of non-holding financial groups will help remove loopholes. In the meantime, however, the issue of large scale investor damages in the wake of redemption halts by some PEFs remains regrettable.(2021 FINANCIAL POLICY OUTLINE) The first policy task is overcoming the pandemic crisis. Overcoming the spread of the virus requires prompt treatment, preventive measures and development of vaccines. The COVID-19 financial policy requires a well-balanced functioning of financial support for the vulnerable sectors, financi