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Jul 08, 2024
- FSC Vice Chairman Speaks about Megatrends and Policy Framework at Future Finance Seminar
- Vice Chairman Kim Soyoung of the Financial Services Commission attended a policy seminar on future finance hosted by Korea Institute of Finance and sponsored by the FSC on July 8. Todays seminar was held under the theme of future megatrends and impending changes in the financial sector, which brought together public and private sector experts with diverse backgrounds, to have discussions on the impact of rapidly changing demographic structure, climate change, and technological advance on the financial market and ways to effectively cope with these changes. At the beginning of the seminar, Vice Chairman Kim delivered a keynote address on the topic of megatrends and policy framework for future finance, in which he emphasized the need for the financial industry and the government to prepare measures to secure sustainable ways to grow in a preemptive manner. The following is a summary of Vice Chairman Kims remarks. Against the backdrop of rapidly changing financial environments and market conditions, the authorities have been thus far mostly focused on responding to issues that needed to be addressed urgently. However, since financial policy can have a significant impact on the structural and macro-level changes, it is important that the authorities set their sight on a medium- to long-term horizon when formulating policy responses. In this regard, the authorities are working on policy frameworks for future finance, based on systematic analyses intended to minimize risks and seek opportunities for growth over a medium- to long-run. The taskforce on future finance organized into three sub-groupsdemographic shift, climate change, and technological advancehave been examining both challenges and opportunities in their respective areas, while seeking policy measures with three specific aimsmitigation, adaptation, and innovation. The mitigation policy is aimed at reducing the impact of impending change and shock, while slowing the pace of their occurrence. The adaptation poli
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Jul 03, 2024
- SFC Imposes Penalty Surcharges on Global Investment Banks for Violating Short Sale Regulations
- The Securities and Futures Commission, a sub-commission within the Financial Services Commission responsible for overseeing the securities and futures markets, held the thirteenth regular meeting on July 3 and decided to impose penalty surcharges amounting to KRW27.173 billion in total on two former Credit Suisse affiliated investment banks for violating short sale regulations under the Financial Investment Services and Capital Markets Act (FSCMA). The level of penalty surcharge imposed on each of the two former Credit Suisse affiliated entities is the largest (KRW16.94 billion on Credit Suisse AG) and the third largest (KRW10.23 billion on Credit Suisse Singapore Ltd.) ever since the penalty surcharge system began to be implemented on naked short sale activities in April 2021. In the case of Credit Suisse AG (currently UBS AG), from April 7, 2021 to June 9, 2022, the investment bank was found to have engaged in naked short sales in the amount of about KRW60.33 billion (162,365 shares on 20 stock items) without possessing these stocks at the time of placing short sale orders. In the case of Credit Suisse Singapore Ltd., from November 29, 2021 to June 9, 2022, the investment bank was found to have engaged in naked short sales in the amount of about KRW35.28 billion (401,195 shares on five stock items) without possessing these stocks at the time of placing short sale orders. In addition, prior to todays meeting, the SFC decided to impose administrative fines worth KRW284.2 million in total on four domestic financial investment businesses, two foreign financial investment businesses, and an individual investor for violating their net short position balance reporting and disclosure duties under the FSCMA. The financial authorities will continue to strictly deal with naked short selling and other unfair trading activities in capital market to promote soundness in market transactions. * Please refer to the attached PDF for details.
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Jun 17, 2024
- Financial Cooperation with Africa to be Strengthened
- The Financial Services Commission and the Korea Federation of Banks will invite and host the banking industry associations of three African countries (Nigeria, Botswana, and Mauritius) and the Southern African Development Community from June 17 to 19 to seek stronger financial cooperation between Korea and Africa. Equipped with young and dynamic populations and abundant natural resources, African economies have been developing rapidly, which has also gained increasing attention from domestic financial sectors. Against this backdrop, the invitation programs have been prepared to promote cooperation in the field of finance, building upon the momentum established at the Korea-Africa Summit held earlier this month. On June 17, the Korea Federation of Banks signed memoranda of understanding (MOUs) with the banking associations of Nigeria, Botswana, and Mauritius to seek stronger cooperation and mutual development of the banking industries. Under the MOUs signed today, the Korean banking sector will offer know-hows and experience in the areas of digital finance, mobile payments, and credit data, and the signatories will hold joint training and engage in other collaboration projects. FSC Chairman Kim Joo-hyun attended the MOU signing event and delivered congratulatory remarks where he emphasized the importance of todays agreement as a beginning for seeking stronger cooperation between Korea and Africa. In this regard, Chairman Kim said that he hopes to see Koreas strong advantage and know-hows in the field of digital finance being able to make great contributions to Africas economic development going forward. Chairman Kim added that Koreas financial industry will also benefit and grow from this process. Apart from todays MOU signing event, the three-day programs for Korea-Africa Economic and Financial Cooperation also include a joint seminar held by the banking associations (Jun. 17), a tour of major financial institutions (Jun. 18), and other cultural events. * Please ref
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Jun 12, 2024
- Household Loans, May 2024
- In May 2024, the outstanding balance of household loans across all financial sectors rose KRW5.4 trillion (preliminary), growing at a faster rate compared with the previous month (up KRW4.1 trillion). * Change (in trillion KRW, m-o-m): +0.1 (Dec 2023), +0.9 (Jan 2024), -1.9 (Feb), -4.9 (Mar), +4.1 (Apr), +5.4 (May)p (By Type) Home-backed mortgage loans rose KRW5.6 trillion, growing at a faster rate compared with the previous month (up KRW4.1 trillion), as the banking sector saw a significant growth in mortgage loans (up KRW4.5 trillion up KRW5.7 trillion). Other types of loans declined KRW0.2 trillion as the banking sector saw the slowing pace of growth (up KRW0.6 trillion up KRW0.3 trillion) and the decline continued in the nonbanking sector (down KRW0.5 trillion down KRW0.6 trillion). (By Sector) Household loans edged up at a faster rate in the banking sector, while the pace of the decline slowed in the nonbanking sector. In May, banks saw a rise of KRW6.0 trillion in household loans, which went up from the growth of KRW5.1 trillion a month ago. The rising trend in the banking sector can be explained largely by the growth in mortgage loans (up KRW4.5 trillion up KRW5.7 trillion) led by housing market recovery and by recent changes made in household loan statistics, which began to take into account certain types of housing loans that were excluded previously. Other types of loans also continued to grow due to seasonal factors, but the pace of growth slowed compared with the previous month (up KRW0.6 trillion up KRW0.3 trillion). In the nonbanking sector, household loans dropped KRW0.7 trillion. Mutual finance businesses continued to see a decline (down KRW1.6 trillion), while specialized credit finance companies (up KRW0.7 trillion), savings banks (up KRW0.1 trillion), and insurance companies (up KRW0.1 trillion) all saw household loans edging up. (Assessment) In May 2024, the growth in household loans was caused largely by the increase in mortgage loans in the ban
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May 27, 2024
- FSC Announces Measures to Support Covered Bond Market to Facilitate Supply of Long-term, Fixed Rate Mortgages
- The Financial Services Commission announced that an agreement signing event was held between Korea Housing Finance Corporation (HF) and five major commercial banks to facilitate payment guarantees on covered bonds on May 27. In accordance with this agreement, HF will begin to provide payment guarantee service on covered bonds issued by banks starting from May 27. This is part of the broader set of government plans intended to support the covered bond market with aims to increase the supply of long-term, fixed interest rate mortgage products by commercial banks. Through HFs payment guarantee service, commercial banks are able to issue covered bonds at lower interest rates and investors are able to invest in safe, long-term assets, which require relatively little capital costs. For instance, with HFs payment guarantee service, covered bonds issued by banks with an AAA rating will have 5 to 21 basis points lower interest rates for issuance, when compared to typical bank bonds with same maturities. Therefore, if banks are incentivized in this way to reduce funding costs, this will encourage them to provide more long-term, fixed interest rate mortgage products at lower interest rates. HF also plans to seek re-securitization of covered bonds. Under this program, HF will purchase 10-yr covered bonds issued by banks, for instance, and through a settlor-trustee trust, issue asset-backed securities and sell them. This program will facilitate the issuance and purchase of long-term covered bonds in the market, and the supply of long-term funds raised this way can be put to use in providing long-term, fixed interest rate mortgages for houses valued more than KRW600 million, which is currently unavailable under the policy mortgage loan program. In line with the introduction of HFs payment guarantee service, there will be other types of incentives for banks and financial institutions. First, when issuing covered bonds with 10-yr or longer maturities, banks will be allowed to use (
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May 16, 2024
- FSC Approves DGB Daegu Bank's Transition from Regional Bank to Nationwide Operator
- The Financial Services Commission decided to approve DGB Daegu Banks application to make a transition from a region-specific operator to a nationwide commercial bank at the 9th regular meeting held on May 16. The FSCs approval will introduce a new nationwide commercial bank for the first time in 32 years since 1992, bringing the total number of nationwide banks to seven. On July 5, 2023, the government announced plans to allow regional banks transition to become nationwide banking business operators as part of its broader policy to promote fair and effective competition in the banking sector. As a follow-up measure, on January 31, 2024, the FSC and the FSS introduced specific method and procedures for authorizing a regional banks transition to operate as a nationwide bank. Following this, on February 7, 2024, DGB Daegu Bank applied for the modification of conditions specified under the Article 8 of the Banking Act. Upon receiving the application, the FSC and the FSS then went through a careful review process by having an external review committee and reached a decision that DGB Daegu Bank meets all the regulatory requirements necessary to be authorized to operate as a nationwide commercial bank. With DGB Daegu Bank making a transition to operate as a nationwide operator, the authorities expect that there will be enhanced competition between banks with increased benefits and convenience afforded to consumers. DGB Daegu Bank plans to open 14 new branches in the Seoul metropolitan area and across regions spanning from Chungcheong-do and Gangwon-do, which will help to boost the level of access to financial services for consumers residing in these regions. In addition, DGB Daegu Bank plans to improve customers access to financial services through advancement of its own service application and expanded partnership with third-party platforms, so as to help reduce costs and offer low interest rate products to consumers. DGB Daegu Bank will also expand credit supply to the s
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May 16, 2024
- KoFIU Unveils H2 2023 Survey Results on Virtual Asset Service Providers
- The Korea Financial Intelligence Unit (KoFIU) conducted a survey on the twenty-nine registered virtual asset service providers (VASPs) to see the current state of the domestic virtual asset market and keep relevant statistics up to date. Survey Overview (Respondents) 29 VASPs(22 exchange service providers and 7 wallet and custodian service providers) (Survey Method) Data collected from VASPs (Period Covered) July 1, 2023 to December 31, 2023 Key Survey Findings for H2 2023 The domestic market for virtual assets in H2 2023 saw increases in terms of average daily trading volume (up 24%), market capitalization (up 53%), total operating profits (up 18%), and total volume of deposits in KRW (up 21%), as virtual asset prices increased and investment sentiment recovered. The total number of users eligible to trade (up 6%) also turned back up from the decline seen in the first half of 2023. When compared with the survey results of H1 2023, in the latter half of the year, the KRW-based exchange service providers saw a notable increase in new listings (up 70%), while the coin-only exchange service providers experienced a significant number of delistings (down 82%), which brought down the total number of virtual asset types available for trade (down 3.5%). Especially, the number of exclusively listed virtual assetsthose tradable via single VASP in domestic marketdropped considerably (down 9.3%). Maximum drawdown, or price volatility, still remained high at 61.5 percent (62.4% in H1 2023). External transfers of virtual assets by exchange service providers also increased considerably (up KRW8.4 trillion, or 28%). Among them, those transferred to the registered entities under the travel rule rose rapidly (up KRW3.8 trillion, or 57%). As of the end of December 2023, there were two coin-only exchange service providers and two wallet and custodian service providers that announced plans to terminate their business operations. As there are growing numbers of VASPs closing down their b
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May 13, 2024
- Household Loans, April 2024
- In April 2024, the outstanding balance of household loans across all financial sectors rose KRW4.1 trillion (preliminary) from the previous month. When compared with the end of 2023, the household loan balance dropped KRW1.8 trillion, which shows that the growth trend remains on a stable course. * Change (in trillion KRW, m-o-m): +2.6 (Nov 2023), +0.1 (Dec), +0.9 (Jan 2024), -1.9 (Feb), -4.9 (Mar), +4.1 (Apr)p (By Type) Home-backed mortgage loans increased KRW4.1 trillion as the banking sector saw a significant growth in mortgage loans (up KRW0.5 trillion up KRW4.5 trillion). Other types of loans went up KRW0.03 trillion from a month ago (down KRW5.0 trillion) as the banking sector saw an increase of KRW0.6 trillion, while the nonbanking sector saw a slower pace of decline (down KRW2.8 trillion down KRW0.6 trillion). (By Sector) Household loans edged back up in the banking sector while declining at a slower pace in the nonbanking sector. Banks saw a rise of KRW5.1 trillion in household loans compared with the previous month as relevant statistics on household loan data began to incorporate certain types of housing loans previously excluded from household loan statistics but classified instead as policy funds. Banks issuance of new mortgage loans also expanded from a month ago (up KRW2.0 trillion up KRW3.6 trillion). A series of initial public offerings scheduled in April-May also pushed up the volume of credit loans temporarily. In the nonbanking sector, household loans fell KRW1.0 trillion. Although the pace of the decline slowed compared with the previous month (down KRW3.3 trillion), the overall trend since the second half of 2022 has steadily shown a slowing trend. Mutual finance businesses continued to see a decline (down KRW2.1 trillion) in household loans, while specialized credit finance companies (up KRW0.6 trillion), savings banks (up KRW0.5 trillion), and insurance companies (up KRW0.01 trillion) all saw growth led by increase in credit loans. (Assessment
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Apr 22, 2024
- Taskforce on ESG Finance Holds Meeting and Discusses Key Details of ESG Disclosure Standards
- The Financial Services Commission held the 4th taskforce meeting on ESG (environmental, social and governance) finance with related ministries, industry groups, investors, and experts on April 22 to have discussions on details of an open draft on domestic ESG disclosure standards. FSC Vice Chairman Kim Soyoung presided over the meeting and outlined basic principles and key details of the draft standards. A Summary of Vice Chairmans Remarks First, this open draft on domestic ESG disclosure standards is consistent with global standards as it amply takes into account cases from overseas. In this regard, the draft standards have been formulated to ensure interoperability with the ESG disclosure standards of other major countries to minimize the burden of redundant disclosure duties for domestic businesses. In addition, the draft standards will mandate climate-related disclosures first, while keeping the disclosure of information on other non-climate-related ESG elements on a voluntary basis. Second, the draft standards have been prepared to provide quality information to investors. Instead of simply requiring businesses to list up relevant data on climate risks and opportunities, the draft standards will actually promote behavioral change from businesses through a more systematic provision of information disclosures based on important categories, such as governance structure, strategy, risk management process, and so on. Third, the draft standards also take into account the needs of enterprises and ensure that there is no excessive burden placed on them. Considering domestic firms capabilities and level of preparedness, authorities will provide detailed guidelines and allow companies to disclose qualitative informationinstead of quantitative datafor certain types of indicators prone to a large degree of subjectivity in their measurement. This open draft on ESG disclosure standards also takes into consideration the need for our economy to address some of the newly emergi
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Apr 11, 2024
- Household Loans, March 2024
- In March 2024, the outstanding balance of household loans across all financial sectors fell KRW4.9 trillion (preliminary), declining at a faster pace compared to the previous month (down KRW1.9 trillion). * Change (in trillion KRW, y-o-y): +6.2 (Oct 2023), +2.6 (Nov), +0.1 (Dec), +0.9 (Jan 2024), -1.9 (Feb), -4.9 (Mar)p (By Type) Home mortgage loans increased KRW0.05 trillion, growing at a much slower pace compared to the previous month (up KRW3.7 trillion), due to a substantial drop in the banking sector (up KRW4.7 trillion up KRW0.5 trillion). Other types of loans declined KRW4.9 trillion, with drops seen in both the banking (down KRW2.8 trillion down KRW2.1 trillion) and nonbanking (down KRW2.7 trillion down KRW2.8 trillion) sectors. (By Sector) Household loans turned lower in the banking sector, while the pace of decline moderated in the nonbanking sector. In March, banks saw a decline of KRW1.6 trillion in household loans, which shifted down from the growth of KRW1.9 trillion a month ago, with the implementation of the stressed debt service ratio (DSR) rules. Other types of loans from banks also continued to decline (down KRW2.8 trillion down KRW2.1 trillion), led by credit loans. In the nonbanking sector, household loans fell KRW3.3 trillion. Mutual finance businesses (down KRW2.4 trillion) and insurance companies (down KRW0.2 trillion) saw slower paces of decline from a month ago, while specialized credit finance companies (down KRW0.4 trillion) and savings banks (down KRW0.3 trillion) saw faster paces of decline. (Assessment) The continued decline in household loans appears to be caused by the prolonged high interest rates and delayed recovery in housing market transactions. The financial authorities will continue to closely monitor situations regarding the housing market and interest rates to make sure that household debt growth is stably managed with a long-term perspective. * Please refer to the attached PDF for details.
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Apr 02, 2024
- Future Finance Taskforce Kick-off Ceremony Takes Place
- The Financial Services Commission held a kick-off ceremony for future finance taskforce on April 2, together with relevant agencies, thinktanks, and academia. In accordance with the 2024 financial policy agendas, a taskforce on future finance has been organized with the aim of finding ways to tackle various challenges, such as climate crisis, population decline, and digital transformation. At the meeting, participants freely discussed about challenges and opportunities in the financial sector brought by demographic shift, climate change, and technological advancement. In his opening remarks, FSC Vice Chairman Kim Soyoung said that we are in the midst of mega trends, such as rapid change in population structure, climate change, and technological innovation. In this regard, Vice Chairman Kim said that these challenges constitute the known unknowns and that they demand systematic analysis and measured responses from both the public and private sectors. The future finance taskforce will be organized into three working groupspopulation, climate, and technology. First, the population working group aims to identify demographic factors that will have impact on the real economy and financial markets. It will also seek to explore ways to more effectively provide financial support measures to help young adults and newlyweds. Second, the climate working group aims to seek ways to reach the 2050 carbon neutral goal and enhance corporate climate adaptation capacity with a long-term perspective. It will also explore various ways to promote climate financing in low-carbon transition, renewable energy, and so on. Third, the technology working group aims to promote the use of advanced digital technology, such as blockchain and artificial intelligence, in financial services to boost user convenience and enhance the competitiveness of financial companies. It will also explore ways to more effectively regulate the use of new technologies and ensure financial stability and consumer prote
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Mar 28, 2024
- FSC Chairman's Visit to Poland Helped to Strengthen Foundation for Bilateral Financial Cooperation
- Chairman Kim Joo-hyun of the Financial Services Commission visited Warsaw, Poland and the United Nations Industrial Development Organization (UNIDO) in Vienna, Austria from March 24 to 28. Korea-Poland Bank Federations MOU and Joint Seminar Chairman Kim attended the Korea-Poland banking associations memorandum of understanding (MOU) signing ceremony and joint seminar event held on March 25 and delivered congratulatory remarks. In his speech, Chairman Kim said that enhanced partnership between the banking groups of the two countries will help to propel economic cooperation between the two countries and expressed strong support for this partnership. Meeting with Chair of the Polish Financial Supervision Authority On March 25, Chairman Kim met with Jacek Jastrzebski, Chair of the Polish Financial Supervision Authority. This marked the first meeting between chief financial authorities of two countries. At the meeting, both sides shared a common view on the significance of strengthening financial cooperation between the two countries against the backdrop of deepening economic cooperation and trade relations in the defense materials and nuclear plant sectors. The two leaders also discussed ways to facilitate Korean banks to gain authorization to operate in Poland and agreed to work for a prompt conclusion of an MOU on supervisory cooperation. Both sides also agreed to strengthen cooperation in extending support for SMEs and startup businesses. Chairman Kim invited Chair Jacek to Seoul for the signing of the MOU, and Chair Jacek responded favorably to his invitation. Meeting with Korean Companies Doing Business in Poland On March 26, Chairman Kim met with a group of Korean enterprises doing business in Poland in the defense materials, battery, and auto parts industries and held talks on their local operating conditions and financing difficulties. At the meeting, Chairman Kim said that providing export financing support is one of the governments key policy agendas and that
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Mar 25, 2024
- FSC to Bolster the Role and Function of the Council on International Financial Cooperation
- The Financial Services Commission and the Council on International Financial Cooperation announced measures to bolster the role and function of the CIFC for 2024 on March 25. The CIFC was launched in 2013 with aims to support domestic financial institutions business expansion overseas and facilitate their sharing of experience and know-how with other countries. Financial institutions from the public and private sectors as well as financial industry associations are members to the CIFC, which is currently run by the Korea Institute of Finance. Since its establishment, domestic financial institutions demand for overseas business expansion has grown. In order to meet this demand and more systematically support domestic financial companies overseas business expansion, the FSC has prepared the following measures to bolster the role and function of the CIFC. First, the networking program including forums and seminars will be held more frequently and more in association with other relevant programs made available by international organizations, for instance. Second, an integrated database system will be set up to facilitate information sharing and exchange between members. Third, the training program will be overhauled to provide more effective vocational training courses on a longer-term basis. Fourth, a visiting scholars program will be newly introduced to invite senior officers from overseas financial regulatory agencies for joint research projects and collaboration. In 2024, this research program will begin with Indonesia and then be expanded to Vietnam. In 2024, the CIFC plans to hold financial cooperation forums twice to provide more opportunities for networking. The CIFC has plans to offer long-term training courses to foreign government officials from Laos, Thailand, Cambodia, and Malaysia. With its organizational capacity expected to grow beginning from this year, the CIFCs role of serving as a control tower for domestic financial sectors business expansion overse
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Mar 25, 2024
- FSC Chairman to Visit Poland to Strengthen Bilateral Cooperation in Financial Sector
- Chairman Kim Joo-hyun of the Financial Services Commission will travel to Poland from March 24 to 27. The visit will mark the first such trip to Poland by an FSC Chairman and underscore increased demand for cooperation in the financial sector since a bilateral summit took place between the two countries in July last year. In the wake of the Korea-Poland summit held in July last year, domestic banks have shown growing interest in expanding business to the Central European country, since Koreas exports to Poland in defense materials, nuclear plants, and infrastructure are expected to rise in the future. In this regard, on Monday, March 25, FSC Chairman Kim Joo-hyun will meet with the Chair of the Polish Financial Supervision Authority and express the Korean government and financial sectors strong commitment to ensure seamless financing for various cooperation projects. At the meeting, Chairman Kim will also seek active cooperation from his Polish counterpart to facilitate Korean banks business operation there. In Poland, Chairman Kim also plans to meet with Korean companies doing business in Poland in defense, battery, and auto parts sectors and hold talks on local market conditions and ways to help resolve their difficulties. Chairman Kim will also attend seminars organized by both countries financial and fintech industry groups and demonstrate support. The FSC expects that Chairman Kims Poland visit will help to expand the horizon of bilateral cooperation to the financial sector and make great contributions to large-scale cooperation projects and trades between the two countries. On a second leg of his trip, Chairman Kim will travel to Austria to meet with officials from the United Nations Industrial Development Organization (UNIDO) and sign an MOU (memorandum of understanding) aimed at strengthening cooperation to promote Korean financial and fintech companies business expansion and operation in developing countries. * Please refer to the attached PDF for details.
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Mar 18, 2024
- OECD-FSC-KIF Roundtable on Digital Finance in ASEAN Held on March 18-19
- The Financial Services Commission held a joint roundtable meeting on digital finance in ASEAN with the Organization for Economic Cooperation and Development (OECD) and Korea Institute of Finance (KIF) for two days on March 18-19. The roundtable was organized around the topic of digital finance, offering officials a chance to share relevant policy trends and to discuss ways to address newly emerging risks arising from digital transformation in the financial sector. The two-day roundtable meeting will be participated by many officials and experts from Asia and OECD member economies. The roundtable meeting will deal with the following topics(a) digital assets, CBDCs and tokenization, (b) DeFi and crypto-assets in ASEAN and beyond, (c) cyber-security in the financial sector, (d) artificial intelligence in finance, and (e) generative AI in finance in Asia and ASEAN. During the opening session, FSC Vice Chairman Kim Soyoung delivered opening remarks where he said that financial innovation based on digital technologies hasbeen making positive impact on boosting the level of productivity in the financial industry. However, Vice Chairman Kim stressed the need to establish appropriate rules and ensure protection for consumers in response to newly emerging risks. Moreover, as there are increasing international exchanges taking place in the financial industry, Vice Chairman Kim said that Korea will seek to strengthen cooperation with international organizations and ASEAN economies to share the latest financial industry trends and ensure regulatory consistency with global standards. The FSC will take into account the global trends and key issues dealt by the roundtable meeting for future policy reference. The FSC will continue to work on strengthening financial cooperation with other countries and international organizations. * Please refer to the attached PDF for details.
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Mar 13, 2024
- Household Loans, February 2024
- In February 2024, the outstanding balance of household loans across all financial sectors fell KRW1.8 trillion (preliminary), declining for the first time since March 2023. * Change (in trillion KRW, y-o-y): +2.4 (Sep 2023), +6.2 (Oct), +2.6 (Nov), +0.1 (Dec), +0.9 (Jan 2024), -1.8 (Feb)p (By Type) Home mortgage loans increased KRW3.7 trillion, edging up at a slightly slower pace compared with the previous month (up KRW4.1 trillion). Mortgage loans from banks went up KRW4.7 trillion, showing a similar pace of growth from the previous month (up KRW4.9 trillion). Mortgage loans from nonbanks fell at a faster rate (from down KRW0.8 trillion a month before to down KRW1.0 trillion in February 2024). Other types of loans declined KRW5.5 trillion with drops seen in the banking and nonbanking sectors. (By Sector) Household loans grew in the banking sector at a slower pace while expanding at a faster pace in the nonbanking sector. Banks saw an increase of KRW2.0 trillion in household loans in February, a drop from an increase of KRW3.4 trillion in the previous month. Mortgage loans from banks fell somewhat from the previous month due to significant declines in policy mortgage loans and group lending for new apartment subscriptions. Other types of loans fell at a faster pace (from down KRW1.5 trillion to down KRW2.7 trillion) led by credit loans. In the nonbanking sector, household loans declined KRW3.8 trillion, falling at a faster pace compared with the previous month (down KRW2.5 trillion). Mutual finance businesses (down KRW3.0 trillion) and insurance companies (down KRW0.6 trillion) saw continuing declines in household loans, and savings banks (down KRW0.1 trillion) and specialized credit finance companies (down KRW0.1 trillion) also saw household loans drop from a month before. (Assessment) Although the outstanding balance of household loans across all financial sectors declined in February for the first time since March 2023, there is growing demand for refinancing loa
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Mar 11, 2024
- FSC and FSS Join APRC MMoU to Strengthen Supervisory Cooperation in Capital Markets
- The Financial Services Commission and the Financial Supervisory Service officially became signatories to the multilateral memorandum of understanding (MMoU) of the Asia Pacific Regional Committee (APRC) under the International Organization of Securities Commissions (IOSCO) on March 8. The APRC is made up of capital market supervisors and regulators from 22 countries across the region of Asia-Pacific. Prior to Korea joining the MMoU, there were 10 member countries already signed up for the supervisory cooperation MMoU, including Hong Kong, Japan, Australia, Singapore, Taiwan, New Zealand, Malaysia, Mongolia, Thailand, and Bangladesh. If the number of signatories grows in the future, the scope of cooperation is expected to grow further. This MMoU on supervisory cooperation was established with aims to strengthen supervisory cooperation and information exchange on securities and derivatives markets among market regulators in the Asia-Pacific region. With the signing of the MMoU, the FSC and the FSS expect to have an enhanced level of supervisory cooperation with overseas regulators. Prior to this, the FSC and the FSS had joined the IOSCO MMoU and E-MMoU (Enhanced MMoU) frameworks in 2010 and 2019, respectively, to enhance cooperation on investigating unfair trading activities and to bolster sharing and exchanging of information. The FSC and the FSS plan to make continuous effort to facilitate seamless exchange of information and mutual cooperation with capital market supervisors and regulators from other countries. * Please refer to the attached PDF for details.
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Mar 11, 2024
- Application for Interest Refunds from Nonbank Lenders to be Available for Small Merchants from March 18
- The Financial Services Commission (FSC) and the Ministry of SMEs and Startups (MSS) announced that small merchants who borrowed from nonbank financial institutions with interest rates ranging from 5 percent to 7 percent as of December 31, 2023 will be able to apply for interest refunds from their lenders starting from March 18. From March 13, the nonbank financial institutions, such as savings banks, mutual finance businesses, and specialized credit finance businesses, will start notifying their customers about the availability of this interest refund support program through their website or via mobile text message. Borrowers who are eligible to receive interest refunds will be able to apply starting from March 18. Interest refunds will begin to be paid out starting from March 29. For a borrower to be eligible to receive interest refunds, he or she should have made interest payments for at least a full-year. Once the lender verifies the receipt of a full-year interest payments, the borrower will receive interest refunds within six business days from the last business day of the first quarter that falls after the borrower made full-year interest payments. For those holding multiple loan accounts, interest payments should have been made for a full-year on all of their loan accounts to be eligible for the payback in interest refunds. Thus, borrowers are advised to check whether they have made interest payments for a full-year before applying. The refund rate on loans will vary depending on actual borrowing rates adopted as of the last day of December 2023. For loans with interest rates ranging from 5.0 percent to 5.5 percent, a refund rate of 0.5 percent will be applied. For loans with interest rates ranging from 5.5 percent to 6.5 percent, the refund rate will be determined as a difference between the actual interest rate adopted and 5 percent. For loans with interest rates ranging from 6.5 percent to 7 percent, a refund rate of 1.5 percent will be applied. The maximu
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Mar 06, 2024
- Authorities Hold Meeting on Policy Finance to Discuss Operation of KRW5 Trillion Fund for MMEs
- The Financial Services Commission held the 6th consultative body meeting on policy finance with related government ministries and policy financial institutions on March 6. FSC Vice Chairman Kim Soyoung presided over the meeting and delivered opening remarks where he emphasized the need for policy financial institutions to frontload the implementation of policy funds as much as possible in the first half of this year in line with the planned frontloading of fiscal spending by the government amid ongoing challenges in the economy. At todays meeting, officials discussed the launching of a fund specifically designed to support middle market enterprises (MMEs). The MME investment fund will be created in the size of about KRW5 trillion with contribution from the banking sector, and it is expected to provide a significant boost to MMEs in their attempt to venture into new industries or expand their operations. Second, officials discussed this years plan for operating the innovative growth fund, which has been set up for operation since last year with aims to boost future growth engines and cultivate innovative venture businesses. For 2023-2027, the innovative growth fund aims to supply KRW15 trillion worth of policy funding support. Last year, despite challenges resulting from high interest rates, the total volume of funds raised at the end of the year surpassed the initial target of KRW3 trillion. For this year, officials decided to raise additional KRW3 trillion for the operation of the innovative growth fund, which will help to facilitate investment in climate related and artificial intelligence technologies. Third, officials discussed ways to refine impact analysis to better examine the effectiveness of policy finance support provided to enterprises through a close input-output analysis performed by Korea Credit Information Services and Korea Institute of Finance. The result of their analysis will be utilized to improve efficiency in the allocation of policy funds supp
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Mar 04, 2024
- Rule Changes Proposed for Upgrading Regulation on Corporate Mergers and Acquisitions
- The Financial Services Commission issued a preliminary notice of rule changes being proposed for improving regulations on corporate mergers and acquisitions under the Financial Investment Services and Capital Markets Act (FSCMA). The revisions being proposed for the enforcement decree of the FSCMA and its subordinate regulation on the issuance and disclosure of securities contain measures to strengthen disclosure duties, improve the process of external evaluation, and upgrade the method for calculating merger prices. First, with regard to enhancing disclosure duties, the revision proposal mandates listed companies to disclose written statements about their board of directors meetings with details regarding what has been discussed and decided on MA related issues. This will ensure that general shareholders can have access to information regarding corporate MA activities. The board of directors written statement should contain information about the purpose of merger, its anticipated effect, merger price and ratio, as well as any dissenting opinion. The board of directors written statement about MAs should be disclosed as an attachment to the securities registration and material disclosure for that particular year. This will help to ensure more responsibility from boards of directors and increased fairness and transparency in the process of MAs. Second, regarding rules on the external evaluation process, the revision proposal establishes a code of conduct for external evaluation agencies to bolster fairness and credibility. In this regard, external evaluation agencies will be required to maintain their own quality management standards, or otherwise be barred from serving as an external evaluator. Their quality management standards should address issues relating to the maintenance of autonomy, objectivity, and fairness, conflicts of interest, confidentiality, and actions to be taken for misconduct. An external evaluation agency offering third-party evaluation service to
