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Oct 27, 2021
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Oct 26, 2021
- Government Unveils Additional Measures for Household Debt Management
- The government announced additional measures to strengthen household debt management at the 47th Meeting of Central Economic Response Headquarters held on October 26. The measures are aimed at preemptively managing household debt-related risks and resolving financial imbalances while ensuring the availability of loans to individuals in actual need. Some of the key measures include improving the effectiveness of DSR rules applied on individual borrowers, strengthening targeted management in the nonbank sector and promoting more installment payments on both housing and personal credit-based loans. These are supplementary measures to the initial household debt management plan announced on April 29, 2021. Background (Recent Trends) The household debt growth has shown a downward trend in recent years after reaching an 11.6 percent growth in 2016. However, it has spiked up again in 2020 due to the pandemic-related policies and rise in asset prices.For this year, the government had previously set the goal of containing the growth of household debt to five to six percent as it sought to control debt levels while continuing to make financing available for first time homebuyers, renters, etc. Along this line, the government introduced the measures to curb credit-based loansand expand the application of the debt service ratio (DSR) rules on individual borrowers in April this year. At the same time, the loan-to-value (LTV) ratio has been eased with the support for rent deposit (including jeonse) made available for young adults, newly married couples, etc. However, household debt levels spiked in the first half of this year due to instability in the housing market and resurgence in the coronavirus infection cases. The growth in credit loans and personal mortgages that led the surge in total debt levels at the end of 2020 stabilized. But loans for rent deposits, collective lending and government-backed housing mortgages all continued to rise with a spillover effect into the nonba
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Oct 26, 2021
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Oct 19, 2021
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Oct 14, 2021
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Oct 14, 2021
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Oct 13, 2021
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Oct 12, 2021
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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 14, 2021
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Sep 13, 2021
- FSC Plans to Make Fractional Trading of Domestic and Foreign Stocks More Widely Available
- The FSC announced its plans to make fractional trading of both domestic and foreign stocks more widely available to help improve access and convenience for investors. Background In 2019, the FSC allowed fractional trading of foreign stocks offered by Shinhan Investment and Korea Investment Securities by designating them as innovative financial services to be granted regulatory exemptions under its financial regulatory sandbox program. As a result, by the end of June 2021, the number of fractional stock traders at Shinhan Investment and Korea Investment Securities reached about 140,000 and 510,000, respectively, with their investment amounts standing at KRW270 million and KRW750 million each. However, fractional trading of domestic stocks remained unavailable due to the principle of indivisibility of shares as well as the non-fractional share-based design with which the domestic securities trading and depository infrastructures was set up. To help improve investor access and convenience, the FSC plans to make improvements to the current fractional trading system and make fractional trading of both domestic and foreign stocks available. Key Details Unlike the current system where individual securities firms have to apply for regulatory exemptions to provide fractional trading services, the new system will be based on a special infrastructure set up at Korea Securities Depository (KSD) that is dedicated to fractional trading and can be accessed and used by any securities firms that wish to offer fractional trading services to their customers. This will strengthen the safety and convenience of fractional trading in both domestic and foreign stocks. (Foreign Stocks) Stock trading in fractional shares of foreign stocks will be directly recorded in the securities firms account books. KSD will maintain separate account books on fraction trades and regularly check their consistency with those of securities firms. Investors will be able to trade in fractional shares of foreig