Press Releases - Financial Services Commission

Press Releases

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Nov 11, 2022

FSC Announces Additional Measures to Stabilize Project Finance ABCP and CP Markets

FSC Vice Chairman Kim So-young presided over a meeting on November 11 with officials from the FSS, the Bank of Korea, financial industry groups and policy financial institutions to review current market situation. At the meeting, authorities discussed recent trends in financial markets, progress of the governments market stabilization measures announced earlier on October 23 and additional measures to help stabilize the CP (commercial paper) market. At the meeting, participants assessed that since the governments market stabilization programs were first announced on October 23, concerns about a severe credit crunch in bond and money markets have eased somewhat. However, relative to the corporate bond market, there are continuing challenges in short-term money market. Financial investment businesses said that thanks to clear regulatory interpretation offered by financial authorities last week to allow securities firms to purchase ABCPs (asset-backed commercial papers) guaranteed by their own companies, there is less burden of having an oversupply of ABCPs guaranteed by securities firms in the market. However, they indicated that refinancing of ABCPs (especially A2 grade) guaranteed by small- and medium-sized securities firms continues to be difficult, which has led to liquidity problems of securities firms and high levels of their CP spreads. Moreover, authorities reviewed the progress of both the public and private sector efforts to stabilize the bond markets supply and demand situation. The government has reduced the volume of government bond issuance this year. The Ministry of the Interior and Safety and local governments plan to pay back debt on municipal bonds and public corporation bonds scheduled to mature before early 2023 and preemptively prepare for portions of guaranteed debt expected to turn into determinate liabilities (total KRW3.4 trillion) through budgeting. In addition, the government is closely working with public institutions to spread out issue da
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Nov 10, 2022

FSC Introduces Revision to Supervisory Regulations to Ease Financing Burden of Homebuyers

The FSC will give advance notices of revision to several supervisory regulations between November 10 and 16 as a follow-up action to implement the housing market-related measures introduced at the 11th emergency economic meeting held on October 27 and the 3rd ministerial meeting on housing market held earlier today. The revised supervisory regulations stated below are expected to take effect from December 1, 2022. a) The loan-to-value (LTV) ratio is currently applied differentially for no-home or one-home owners in regulated areasby different locations and different price of houses. This will be raised to uniform application of 50 percent. b) Allow no-home or one-home owners who plan to purchase an apartment valued over KRW1.5 billion in designated speculation areas and high-speculation areas to finance their house with a mortgage loan. c) Raise the top LTV ratio for lower income and non-speculative homebuyerswho plan to purchase a house in regulated areas to up to 70 percent with the maximum loan amount of KRW600 million. * Please refer to the attached PDF for details.
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Nov 09, 2022

Household Loans, October 2022

In October 2022, the outstanding balance of household loansacross all financial sectors fell KRW0.2 trillion (m-o-m), declining for the second consecutive month from a month ago (down KRW1.2 trillion).Financial authorities will swiftly roll back relevant loan regulations to help alleviate difficulties of non-speculative homebuyers. At the same time, authorities will stably manage the grow rate of household debt. (Overall) Household loans across all financial sectors dropped KRW0.2 trillion in October. The growth rate (y-o-y) was 0.2 percent which continues to show a downward trend since the second half of 2021. (By Type) Mortgage loans increased at a faster rate than the previous month and other types of loans fell at a slower rate, leading to a slowdown in the pace of an overall decline in household loans. - (Mortgage Loans) Mortgage loans rose KRW2.0 trillion in October, growing at a slightly faster rate compared to the previous month (up KRW1.9 trillion), led by group lending for new apartment subscription. - (Other Types of Loans) Other types of loans fell at a slower rate (down KRW2.2 trillion) compared to a month ago (down KRW3.1 trillion), led by a drop in credit loans. (By Sector) Overall household loans edged down as nonbanks saw a growth and banks maintained a declining trend. - (Banking Sector) Banks saw a drop of KRW0.6 trillion in household loans. Mortgage loans from banks grew KRW1.3 trillion,rising at a faster rate than the previous month (up KRW0.9 trillion), as government-sponsored mortgage lending and group lending for new apartment subscription went up KRW1.0 trillion and KRW0.7 trillion, respectively. Other types of loans from banks fell KRW1.9 trillion, declining at a slower rate than the previous month (down KRW2.1 trillion), led by a drop in credit loans (down KRW1.6 trillion). (Nonbanking Sector) In October, nonbanks saw an increase of KRW0.4 trillion inhousehold loans with declines in mutual finance (down KRW0.4 trillion) and specialized cre
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Nov 09, 2022

FSC Chairman Meets with Heads of Banks and Discusses Market Stabilization Measures

FSC Chairman Kim Joo-hyun met with the heads of Korea Federation of Banks and twenty major banks on November 9 and held talks on financial market stabilization efforts. At the meeting, participants shared their outlook and views on financial market conditions and discussed (a) the banking sectors constructive role and action plan for market stabilization and (b) current difficulties in banks financing and operation of funds as well as ways to resolve them. Summary of Remarks by FSC Chairman Rapid increases in interest rates are continuing to put stress on our economic situation. However, unlike in the previous crisis situations such as thefinancial crisis in 2008 and the COVID-19 pandemic in 2020, it is now difficult to handle this situation by lowering interest rates or expanding fiscal spending. Now is the time for the financial industry and the government to come together and respond to difficulties by effectively making use of all available capacities in our economy. Under these circumstances, the banking sector has thus far provided a steady reinforcement to support vulnerable groups and supply liquidity in response to the recent turmoil in money market and bond market. The five major financial holding companies are making efforts to stabilize markets through their support plan announced on November 1. To sustain stability in financial markets, it is necessary to look closely at both the trees and the forest as stated earlier by former Fed chair Ben Bernanke. In this regard, the banking sector, as the core of our financial system, should provide a leading role to stabilize market for the whole financial system over the banking sector. First, aside from abrupt rate hikes, there are concerns about credit crunch that may result from the collapse of market confidence. In this regard, the combined effects of the governments market stabilization measures and the banking sectors efforts to stimulate the flow of funds will significantly help businesses and micro-enterp
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Nov 04, 2022

Financial Authorities Hold Meeting to Monitor Market Situation in Wake of U.S. Fed Rate Hike

The FSC held a meeting with the Financial Supervisory Service, financial industry groups and policy financial institutions on November 4 to review financial market condition following the recent increase in the U.S. federal funds rate (+75bps). On November 2, the Fed raised its policy interest rate by 75 basis points for the fourth consecutive time. The Fed Chair Jerome Powell mentioned about a possible slowdown in the pace of future increases but suggested that the Fed will go on to raise rates and that the ultimate interest rate will be higher than previously expected. At todays meeting, authorities reviewed financial market conditions with a focus on the impact of the FOMC decision on domestic money market including the corporate bond and CP (commercial paper) markets. Authorities also checked the progress and future plans for the KRW50 trillion-plus liquidity support measures. a) Bond market stabilization fund: Purchase of CPs began last week; purchase of bonds issued by specialized credit finance companies began this week; and first round of additional capital calls expected to be completed this week (Oct. 20). b) Korea Securities Finance Corporation: About KRW1 trillion in repos (repurchase agreements) and loans provided to small- and medium-sized securities firms so far; purchase of CPs issued by securities firms began on November 1 (Oct. 26). c) Five major financial holding companies: Announced that KRW95 trillion in liquidity supply will be implemented (Nov. 1). d) Banks: Industry-wide market stabilization efforts in place such as reducing bank bond issuance and expanding market liquidity support; temporary easing of LCR (liquidity coverage ratio) requirement (Oct. 21) and loan-to-deposit ratio (Oct. 27) announced; and a working-level taskforce to regularly monitor situation of banking sector launched on Nov. 3. e) Insurance sector: Measures to support liquidity conditions of non-life insurers (Oct. 28) and life insurers (Nov. 3) are being taken. f) Financi
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Nov 04, 2022

Authorities Hold Meeting to Review Financing Situation of Specialized Credit Finance Businesses

The FSC and the FSS held a meeting with the Credit Finance Association of Korea and specialized credit finance business companies (credit card firms and capital companies) on November 4 to review financial market situation. At the meeting, financial authorities checked the borrowing condition (bonds and CPs) of specialized credit finance business companies and listened to their opinions. Financial authorities have been keeping close tabs on the financing condition of specialized credit finance businesses and have already taken a necessary step to facilitate their bond financing by allowing the bond market stabilization fund to buy financial bonds issued by several specialized credit finance businesses from November 3. In the mean time, the ongoing regulatory plan to reduce the maximum ratio of financial bonds issued by specialized credit finance business companies, which are incorporated into the portfolio of derivatives-linked securities (ELS, DLS, etc.) issued by securities firms to hedge risk, will be applied flexibly. According to the previous plan, the maximum ratio would have been 12 percent until the end of 2022 and lowered to 8 percent from the beginning of 2023. However, that plan is postponed for three months, which will allow those ELS or DLS to incorporate up to 12 percent of financial bonds issued by specialized credit finance business companies for the purpose of risk hedging until the end of March 2023. At the meeting, financial authorities encouraged specialized credit finance business companies to make persistent efforts to support the stabilization of financial markets by effectively managing their own liquidity condition and the soundness of their assets. Authorities emphasized that financial authorities and the industry should make joint efforts and communicate regularly to stabilize markets. Financial authorities will continue to closely monitor changes in financial markets and promptly carry out necessary measures to stabilize markets. * Please
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Nov 03, 2022

Authorities Hold Meeting with Life Insurance Businesses to Monitor Market Situation

The FSC and the FSS held a meeting with life insurers on November 3 to share current issues in the insurance sector and monitor current market situation. At the meeting, participants discussed the recent situation where insurance companies are having to resort to bond sales due to an abrupt increase in demand for liquid assets following a rise in the number of surrendered savings insurance policies driven by increasing interest rates on savings products amid growing market uncertainties. In this regard, the insurance sector expressed the need for measures that will help them accumulate more liquid assets or alleviate their burden of having to maintain certain levels of liquid assets. In response, financial authorities stated that the insurance companies rising demand for liquid assets is understandable. However, to ensure stability in money market, authorities asked insurers to refrain from selling bonds and more actively contribute to market stabilization efforts as institutional investors. Nonetheless, authorities decided to seek measures to help insurers to better respond to the recently expanded volatility and uncertainty of funding market. To this end, authorities will temporarily ease the liquidity risk evaluation standardfor insurers to facilitate their active contribution to market stabilization efforts such as capital calls for the bond market stabilization fund. In addition, at a meeting with non-life insurers on October 28, authorities already decided to expand the types of liquid assets for insurers when applying the liquidity ratio regulationto ease their burden of maintaining liquid assets. Also, for other measures to increase liquiditysuggested by insurers, authorities will promptly review their viability while maintaining close communication throughout. The measure to temporarily relax the liquidity risk evaluation standard for insurers will take effect promptly with a revision to the detailed regulations on supervision of insurance businesses in Nov
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Nov 01, 2022

FSC Chairman Meets with Financial Holding Company CEOs and Discusses Market Stabilization Measures

FSC Chairman Kim Joo-hyun met with CEOs of five major financial holding companieson November 1 and held talks on current financial market situation. At the meeting, Chairman Kim and participants discussed the important role of financial holding companies in stabilizing markets, ensuring liquidity provision to the real economy and providing support for vulnerable debtors. Summary of Remarks by FSC Chairman Amid global monetary policy tightening, Koreas money market reacted sensitively to certain market shocks, which has resulted in the spread of anxieties even to the corporate bond market. However, the governments swift announcement and implementation of market stabilization programs worth KRW50 trillion-plus, in conjunction with the Bank of Korea and the banking sectors speedy efforts, helped to stop market situations from getting worse and that market conditions are gradually returning to stability. To ensure effectiveness in the governments market stabilization measures, it is necessary to have market participants play their parts and cooperate with each other to facilitate seamless circulation of funds. In particular, the role and responsibility of financial holding companies and their affiliated financial institutions like banks are important as they make up a big part of financial markets and have good financial and liquidity conditions. Financial holding companies and their affiliated banks recent earnings temporarily increased mostly as the amount of loans increased amid expansive fiscal and monetary policies put in place to deal with the COVID-19 pandemic and as global monetary policy tightening followed. Thus, it is expected that financial holding companies and their affiliated banks will play a role in enabling smooth flow of funds through financial markets by acting as intermediaries to stabilize markets, ensure provision of liquidity to the real economy and assist vulnerable debtors. In this regard, financial holding company CEOs are encouraged to make e
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Oct 28, 2022

Authorities to Temporarily Ease Regulation on Bond Issuance Procedure for Banks

The FSC and the FSS will temporarily ease a rule on the bond issuance procedure from October 28 to help banks more flexibly correct their already filed total amount of bonds to be issued. Pursuant to the Financial Investment Services and Capital Markets Act (FSCMA), banks are issuing their bonds after filing advance registration statements with the FSC that include total amount of bonds to be issued for certain periods in the future (from two months to two years each, under the universal shelf registration statement system).Under the FSCMA, when a bank wants to correct the total amount of bonds to be issued written on an already filed registration statement, the amount can only be reduced up to 2+0 percent from the predetermined amount. This rule restricts banks from making reduction to the predetermined issue amount of bonds on their registration statement by more than 20 percent when they need to take steps in reaction to market uncertainty or take measures to help stabilize the bond market. Responding to this, authorities will not impose penalties on banks that fail to issue bonds according to their previously submitted registration statements. The penalty exemption will apply to bank bonds already determined to be issued until December 31, 2022 on the statements. Authorities will consider the need for extending the period of penalty exemption in the future after taking into account market situations. This exemption will relieve banks from a duty to issue bonds just to comply with their previously submitted registration statements and thereby alleviate potential worries in the bond market that bank bond issuance may drive out the demand for corporate bonds. With the issuance of a no-action letter, this penalty exemption will take effect immediately on October 28. * Please refer to the attached PDF for details.
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Oct 28, 2022

Authorities Hold Meeting to Review Credit Supply to Lower Income Groups by Credit Businesses

The FSC and the FSS held a monitoring meeting with the Consumer Loan Finance Association on October 28 to check the situation of credit business sector with a focus on lower income groups. Financial authorities reviewed the current status of credit supply to lower income groups by credit businesses, checked borrowing conditions of credit businesses and listened to opinions raised by the Consumer Loan Finance Association. At the meeting, financial authorities and the association shared a common recognition that if credit supplies from credit businesses shrink significantly under the current economic conditions, lower income groups will face more difficulties. In this regard, financial authorities demonstrated a desire to actively communicate with the credit business sector. Authorities also encouraged credit businesses to fulfill their role and duty as a pillar of lower income finance by ensuring credit supply for lower income groups. * Please refer to the attached PDF for details.
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Oct 28, 2022

Authorities Hold Meeting to Review Asset Management Conditions of Insurance Sector

The FSC and the FSS had a meeting with non-life insurance companies hosted by the Korea Insurance Research Institute on October 28 to share recent issues in the insurance sector and check current market situations. Authorities reviewed the liquidity condition of insurers and their management over payment capacity amid recently increased uncertainty in financial markets. Authorities and participants discussed the role of insurers as major institutional investors to help stabilize the current market situation. At the meeting, financial authorities decided to pursue measures in response to recently increased volatility and uncertainty in money market. In this regard, authorities will allow more asset types to be recognized as liquid assets when applying the liquidity ratio regulation. Accordingly, the definition of liquid assets, which referred to assets with maturity of three months or less before, will be broadened to include instantly cashable assets such as debt securities with maturities of three months or more which are tradable in tight markets. In addition, despite current difficulties in their asset management conditions, financial authorities encouraged insurers to more actively contribute to market stabilization efforts as institutional investors, since their soundness indicators are expected to improve with the introduction of a new capital adequacy framework (K-ICS or Korean Insurance Capital Standard)next year. On November 3, authorities plan to hold a market monitoring meeting with life insurers. Authorities will continue to keep up with changes in financial markets carefully and carry out market stabilization measures promptly when needed. * Please refer to the attached PDF for details.
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Oct 27, 2022

FSC Proposess Revision of Supervisory Regulation on Savings Banks to Improve Soundness Management

The FSC proposed a revision to the regulations on supervision of mutual savings banks in order to improve management of their financial soundness. The key changes will require savings banks to: (a) set aside additional loan loss reserves for borrowers who have debt accounts with multiple lending institutions; (b) calculate their credit extension limits for real estate-related business category, which is regulated for asset quality control, based on de facto borrowers who have a duty to repay principal; and (c) exclude credit extension to nonoperational business branches (e.g., SPC branches) from the calculation of total credit extension within their operating localities. Background Savings banks have grown steadily since a major industry-wide restructuring in 2014, with total assets and net profits increasing year after year. So far, their financial indicators have been stable. However, as savings banks increasingly deal with vulnerable borrowersdebtors with multiple debt accountsthere is a growing need to strengthen savings banks financial soundness management in preparation for future external shocks such as further interest rate hikes or a drop in housing prices. In order to preventively manage mutual savings banks' financial soundness, authorities prepared the revision proposal below for the supervisory regulation of those institutions. Key Revision Details a) Additional loan loss provisions will be required for borrowers with multiple debt accounts. Most savings banks are currently maintaining higher-than-required loan loss provisions in accordance with the asset soundness categories established by supervisory regulation. However, unlike other financial sectors such as mutual finance and credit card companies, there is no rule requiring savings banks to set aside additional loan loss provisions to cover losses from borrowers with multiple debt accounts. As a result, the supervisory regulation will be amended to require savings banks to establish additional loan
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Oct 27, 2022

FSC to Bolster Financial Support Programs to Actively Assist Revitalization of Economy

The 11th emergency meeting to stabilize peoples livelihoods was held on October 27 chaired by President Yoon Suk Yeol. At this meeting, relevant ministers and vice ministers discussed the governments programs to revitalize the economy. The FSC announced plans to bolster various financial support measures. The plans aim to (a) ease regulations in housing finance to sustain the soundness of the construction sector, (b) provide liquidity to stabilize operating conditions of SMEs and (c) relieve interest rate burden for households. Key Details of Financial Support Measures Announced a) (Easing Regulations in Housing Finance) Authorities will ease excessive LTV (loan-to-value) regulations by raising LTV ratio ceiling in regulated areas for no-home or one-home owners from 20-50 percent to 50 percent and allowing no-home or one-home owners to be eligible for home mortgage loans on apartments worth more than KRW1.5 billion. b) (Supporting Liquidity Provision for SMEs) Authorities will prepare KRW50 trillion worth of financial support package to alleviate interest rate burden on SMEs and startups and to provide sufficient financing for their future growth. c) (Reducing Interest Burden for Households) Authorities will relax the eligibility requirement for Relief Conversion Loan and encourage banks to voluntarily expand the scope of debtors eligible for their own debt adjustment programs. One-home owners whose house price is KRW600 million or less and annual income is KRW100 million or less can apply for Relief Conversion Loan from November 7. Maximum loan amount available will be increased from KRW250 million to KRW360 million. For banks debt adjustment programs, banks have offered these programs only to mortgage holders who lost jobs, closed businesses or got sick. Now, banks will additionally make mortgage holders undergoing difficulties in making paymentswhich became burdensome amid interest rate hikeseligible for these programs. * Please refer to the attached PDF for deta
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Oct 27, 2022

Regulation on Loan-to-Deposit Ratio to be Temporarily Eased to Facilitate Corporate Financing

The FSC announced that financial authorities will temporarily ease the regulation on loan-to-deposit ratio, which will enable banks and savings banks to provide sufficient liquidity to businesses. The demand for business loans increased as a result of the recent contraction of the corporate bond market.However, the current regulation on loan-to-deposit ratiohas prevented banks from responding actively to these demands for borrowing. To facilitate active response, loan-to-deposit ratio is chosen as a first step of temporary regulatory easing because it is only domestically regulated and swiftly adjustable. Authorities will continue to monitor financial market situations and consider whether other deregulatory steps on such indexes like LCR (liquidity coverage ratio), NSFR (net stable funding ratio) should be taken. Details of Temporary Regulatory Easing To help banks and savings banks to more effectively respond to corporate loan requests, the loan-to-deposit ratio requirements will be eased from 100 percent for both to 105 percent for banks and 110 percent for savings banks. The eased loan-to-deposit ratio requirements will be applied for upcoming six months first, and authorities will take into account extending the period after reviewing market situation. With this easing of loan-to-deposit ratio requirements, banks and savings banks will have additional capacity to lend more to businesses. Furthermore, competition for deposit-taking is alleviated, and thus reduced borrowing costs will help in part to contain upward pressure on interest rates of corporate loans. Further Plan Financial authorities will issue a no-action letter in October to allow temporary easing of loan-to-deposit ratio rules immediately. Changing the calculation method will also take effect immediately with a no-action letter in October, but authorities will revise the supervisory regulation on banking business afterward to make the change officially. Authorities will maintain close communication
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Oct 26, 2022

Authorities Hold Market Monitoring Meeting to Check Market Stabilization Efforts of Banks

The FSC and the FSS had a meeting with five major banks on October 26 to check the progress of the banking sectors efforts to stabilize current financial market situation after last weeks decision to postpone gradual normalization of banks LCR (liquidity coverage ratio) requirement by six months. At the meeting, officials from the banking sector said that banks now have more capacity for lendingwith the help of the postponement in gradual normalization of their LCR requirementand pledged to strengthen efforts to stabilize markets. In particular, banks said that they will purchase CPs (commercial papers), ABCPs (asset-backed commercial papers) and electronic short-term bonds to stabilize money market and bond market. Meanwhile, banks showed their commitment to quickly respond to capital calls from the bond market stabilization fund and minimize issuance of bank bonds. In addition, banks expressed their willingness to maintain financing support for the corporate sector through the purchase of special bank bonds including bonds issued by the Korea Development Bank (KDB), the supply of corporate loans and the extension of credit line. Financial authorities encouraged the banking sector to prop up and stabilize financial markets. Authorities also promised to step up communication with banks and keep close tabs on financial market situations. * Please refer to the attached PDF for details.
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Oct 26, 2022

Liquidity Support Programs Made Available for Securities Firms

The FSC held a meeting with securities firms on October 26 to explain the implementation plan of market stabilization measures, which was announced at the government-wide emergency meeting on macroeconomic and financial stability held on October 23. The meeting also checked the liquidity conditions of securities firms and money market. Authorities announced that liquidity support programs will be available for securities firms as part of the market stabilization measures announced at the earlier emergency meeting. The Korea Securities Finance Corporation (KSFC) begins providing KRW3 trillion-plus of liquidity support for securities firms from today. The Korea Development Bank (KDB) will begin to purchase KRW2 trillion-plus worth of CPs (commercial papers) issued by securities firms from October 27. With these programs in place, authorities expect that securities firms undergoing temporary liquidity shortages will be able to secure liquidity, depending on their situations. Key Details of Liquidity Support Programs a) Korea Securities Finance Corporation The Korea Securities Finance Corporation (KSFC) begins to provide KRW3 trillion of liquidity support for small and medium-sized securities firms through repurchase agreements (repos) and stock-secured loans from October 26. In particular, since the coverage of collateralizable securities for repos and loans is further expanded, securities firms will be able to make better use of this liquidity support program. b) Korea Development Bank The Korea Development Bank (KDB) begins to operate the corporate bond and CP purchase program worth KRW10 trillion. The KDB injects KRW2 trillion first to purchase CPs issued by securities firms from October 27. However, as this program exceptionally purchases financial companies CPs only during this time, the liquidity support will be provided to them with a condition of restructuring efforts. c) Efforts Aimed for Normalization of Money Markets by Securities Industry Along with the ope
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Oct 24, 2022

Financial Authorities Hold Meeting to Respond to Bond and Money Market Situation

FSC Chairman Kim Joo-hyun presided over a meeting of senior FSC officials on October 23 right after the government-wide emergency meeting on macroeconomic and financial stability took place. At this meeting, Chairman Kim ordered authorities to promptly take follow-up actions to implement the support measures announced at the earlier emergency meeting. After the senior official meeting, FSC Standing Commissioner Kwon Dae-young held another meeting with the Financial Supervisory Service (FSS), financial industry groups, policy financial institutions and commercial financial institutions to check the recent situation of bond and money market and related risk factors in financial institutions. At the meeting, financial authorities explained that they will immediately activate the KRW50 trillion-plus liquidity of supportive measures announced at the government-wide emergency meeting. Authorities emphasized that the government, aiming to ensure market stability, will provide ample support by all means necessary. In addition, as restoration of market mechanisms is the key to overcome the current problematic situation, authorities said, market participants such as financial institutions and institutional investors also should step up their own efforts to facilitate recovery of the role of financial markets as intermediaries and accordingly to ensure a virtuous cycle. Moreover, authorities underscored the need for concerted efforts of both the government and the private sector. Application of all available means at their disposal and close communication between them should be in harmony to ensure market stability as the government alone has limited financial resources. Financial industry groups, in response to authorities request, also showed their commitment to strengthen efforts to stabilize financial markets and actively cooperate with the governments measures. * Please refer to the attached PDF for details.
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Oct 21, 2022

FSC Decides 6-Month Postponement in Rolling Back Regulatory LCR for Banks

The FSC held a meeting with the Financial Supervisory Service (FSS) and five major bankson October 20 to review financial market situation with a focus on the banking sectors capital raising and management and the atmosphere of financial markets including money market. At the meeting, financial authorities and participants from five major banks shared the recent view that volatility and uncertainty have expanded in money market. In order to actively respond to this situation, financial authorities decided to slow down the pace to reverse eased regulations during the pandemic. Following this, the date of regulatory rollback on banks LCR (liquidity coverage ratio) requirement will be postponed for six months. Moreover, financial authorities encouraged banks to step up efforts in helping to stabilize the corporate bond and CP (commercial paper) markets. * Under the current regulatory rollback plan, banks are allowed to maintain regulatory LCR of 92.5% until the end of December 2022. But a six-month postponement would allow them to maintain LCR requirement of 92.5% until the end of June 2023. Financial authorities will strengthen monitoring of financial markets in the future and seek timely implementation of necessary measures. * Please refer to the attached PDF for details.
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Oct 20, 2022

Scope of Data Categories for Financial MyData Service to be Expanded

The FSC announced a plan to expand available data on financial MyData service from the end of this year. The number of personal data categories will grow significantly from 492 to 720, which can cover most financial sectors including banks, insurers, card companies, financial investment firms and public financial institutions. A demand survey on MyData service providers in March 2022, which was conducted right after the launch of financial MyData service in last January, revealed additional data categories that need to be added. To insert these categories into MyData ecosystem, many data providers like financial industry groups, financial institutions and MyData service providers voluntarily organized MyData taskforce to discuss mutual development and cooperation. Between April and August this year, the taskforce held over 40 meetings and reached an expansion plan. MyData portal (www.mydatacenter.or.kr) will provide information on new service offerings and service improvement of MyData service providers, enabled by this expansion of data categories available. Achievement So Far (Penetration of MyData Service) Since the launch of financial MyData service on January 5 this year, financial MyData service has grown rapidly. The cumulative number of subscribers grew to about 54.8 million (in September 2022), increased about 3.9 times from about 14 million users in January. The volume of API (Application Programming Interface) transfers per day went up from 274 million at the end of January to about 384 million at the end of September. The number of MyData service providers also increased from 33 to 52 for now. (Enhanced Consumer Convenience) Financial MyData service made data ecosystem more consumer-oriented where financial consumers can quickly and conveniently access a variety of their personal data scattered around financial sphere with a single sign-on. As data sharing practice changes from indiscriminate data scraping to formal data transfer under consumer acknowled
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Oct 20, 2022

FSC Chairman Orders Short-term Money Market Stabilization Measures

Financial authorities observe money market with careful attention to the recent increase in its volatility. In particular, authorities are closely watching instigating factors that contribute to market anxieties in the aftermath of the PF-ABCPincident in Gangwon-do, where the provincial government promised debt guarantee. In this regard, aiming to prevent those anxieties from spreading across financial markets, FSC Chairman Kim Joo-hyun urged authorities to strengthen market response efforts in need. To this end, authorities will make the bond market stabilization fund restart the purchase of corporate bonds and CPs (commercial papers) with KRW1.6 trillion of residual amount in it and prepare for making additional capital calls immediately. Authorities are also monitoring securities firms and specialized credit finance companies with a focus on their liquidity availability, and plan to actively provide liquidity support through the Korea Securities Finance Corporation. In addition, authorities would ease some liquidity requirement for financial institutions in such a way to postpone the normalization of banks regulatory LCR (liquidity coverage ratio). Along this line, if needed, authorities will promptly prepare and announce a financial support program to avoid the spread of fear related to the real estate development project financing market. * Please refer to the attached PDF for details.
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