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Aug 02, 2017
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Jul 27, 2017
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Jul 26, 2017
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Jun 28, 2017
- FSC Identifies D-SIBs for 2018
- The FSC identified on June 28, 2017, four bank holding companies and one bank as domestic systemically important banks (D-SIBs) for 2018: Shinhan Financial Group, Hana Financial Group, KB Financial Group, NH Financial Group and Woori Bank.Under the D-SIB framework of the Basel Committee on Banking Supervision (BCBS), the D-SIB higher loss absorbency requirement is phased in by 0.25% per year from 2016 to 2019. Therefore, those identified as D-SIBs for 2018 are required to set aside an additional common equity capital of 0.75%, and the higher loss absorbency requirement will take effect on January 1, 2018.The BIS ratio for the identified D-SIBs at the end of March 2017 exceeds the minimum capital adequacy ratio1. Therefore, there is no actual burden at present for the identified D-SIBs to set aside additional capital.The FSC will identify D-SIBs every year in accordance with assessment criteria recommended by the BCBS.*Please read the attached file for details.
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Jun 21, 2017
- FSC Held Market Monitoring Meeting on Results of MSCI 2017 Market Classification Review
- FSC Vice Chairman Jeong Eun-bo held a meeting on June 21 with officials from relevant agencies to discuss the impact of the MSCI’s 2017 Market Classification Review and the government’s responses.INCLUSION OF CHINA A-SHARES INTO MSCI EMERGING MARKET INDEXIn its annual market review, MSCI decided to include China A-shares, 222 large-cap stocks of Chinese companies listed in either Shanghai or Shenzhen, into the MSCI Emerging Market (EM) Index.IMPACT ON KOREA’S FINANCIAL MARKETAs the inclusion of China A-shares increases China’s weighting in the MSCI Emerging Market Index, Korea’s weight in the same index is expected to decrease by 0.23 %p from its current 15.5%. Given the amount of funds tracking MSCI EM Index, which ranges between KRW 250 trillion (USD 230 billion) and KRW 1,900 trillion (USD 1.8 trillion), Korea may experience possible outflow of KRW 600 billion to KRW 4.3 trillion from the equity market.The FSC, however, sees MSCI’s decision will have a limited impact on the Korean stock market for the following reasons:▪ The change will be actually reflected in the MSCI EM Index in a year, from June 2018.▪ The amount of global funds investing in emerging markets continues to increase, recording a net inflow of USD 18.1 billion into emerging markets from April to May 2017.▪ Given that the Korean stock market attracted a net foreign capital inflow of KRW 9 trillionin the first five months this year alone, the amount of possible outflows (max. KRW 4.3 trillion) is not so significant.GOVERNMENT’S RESPONSESThe government will keep monitoring the impact of the MSCI’s decision to include China A-shares into its emerging market index on the Korean equity market. We will also continue our policy efforts to improve global competitiveness and attractiveness of our capital markets, and consultation with MSCI in regard with the inclusion of Korea on the list for potential reclassification to the MSCI Developed Market Index.* Please read the attached file
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Jun 14, 2017
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Apr 13, 2017
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Apr 03, 2017
- Korea's 1st Internet-only Bank Open for Service
- ‘K bank’, Korea’s first internet-only bank is officially launched on April 3 for service.At the opening ceremony, Financial Services Commission Chairman Yim Jong-Yong emphasized three significant meanings of the launch of K bank. First, K bank has already brought about a new wave of competition in the banking sector. Second, financial consumers will be able to enjoy numerous benefits including lower banking transaction cost, more convenient banking services, and easier access to loans compared to those provided by commercial banks. Third, more descent quality jobs will be created in the banking, IT, and fintech sectors.K bank will supply mid-interest rate loans worth KRW 500 billion for the next three years. It will start with providing retail banking services and its business scope will be widened to include mortgage loan, payment services, foreign exchange, and fund sales in time.K bank acquired preliminary approval for banking business in November 2015, and final approval in December 2016.*Please refer tothe attachedPDF for details.
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Mar 12, 2017
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Jan 05, 2017
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Dec 29, 2016
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Dec 14, 2016
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Dec 11, 2016
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Nov 24, 2016
- Follow-ups on the Household Debt Management Measures Announced on Aug.25
- The FSC announced follow-up measures on household debt management as the measures announced on August 25, 2016 started to show a sign of policy effects, particularly in slowing down the pace of household debt growth in the non-banking sector and collective lending. Since the August 25 measures took effect, collective lending for apartment buyers and non-residential mortgages from the mutual banking sector fell significantly. (i) The outstanding balance of collective loans remains on the rise as loans for middle payments for previously-signed contract were taken out. However, the amount of newly approved loans for middle payments to purchase an apartment sharply fell in October.(ii) The growth pace of household loans in the mutual banking sector started to slow down in November since the loan-to-value ratios on non-residential mortgages in the sector were tightened on October 31. The follow-up measures are aimed to extend tighter screening standards for loan approvals, to collective mortgages and loans from mutual finance institutions, which have been under less strict standards than bank mortgages. Guidelines for loan screening will be applied to such collective loans and mutual finance loans as well, under the principle that household debt should be borrowed within the borrower’s repayment ability and repaid in installments from the beginning.- For pre-sale of new apartments after January 1, 2017, home buyers’ collective loans to pay the remainder of the money will be subject to tighter screening standards, as currently applied to banks’ mortgages. - Mutual finance institutions will establish and implement their guidelines for screening loan applications in the first quarter of 2017. - The debt service ratio(DSR) will be used as a reference from early December whenfinancial institutions screen loan applications and assess borrowers’ repayment ability. * Please read attachedf file for details.
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Nov 22, 2016
- Measures for Improvement of Derivatives Markets
- The FSC announced a set of measures to make South Korea’s derivatives markets more advanced and sounder as this year marks the 20th anniversary of the establishment of derivatives markets in 1996. Key Points EXCHANGE-TRADED DERIVATIVES MARKETTo boost derivatives trading and enhance diversity of derivatives in the market, improvements will be made on both supply and demand sides. - Supply side: simplification of listing procedures, diversification of derivatives, adjustment of trading units for KOSPI200 futures and options - Demand side: flexible requirements for investors, introduction of the ‘omnibus account’ for foreign investors OVER-THE-COUNTER(OTC) DERIVATIVES MARKETRisk management system will be established with the introduction of global regulatory standards such as margin requirements for non-centrally cleared derivatives and electronic trading platforms. DERIVATIVE-LINKED SECURITIES MARKETThe FSC will strengthen risk management and investor protection, while pursuing more diversification of products to meet various investment needs. - For ELS DLS markets, stress tests will be conducted on regular basis to strengthen risk management of securities firms. To enhance transparency in fund management, assets of ELS issuance and management will be separately managed. - Investor protection will be strengthened in ELS DLS markets with the introduction of tougher “Know-your-Product Rule” and a “cooling-off period” for investors. - Development and listings of more derivatives-linked products will be promoted as alternatives to ELS products. Detailed Measures1. EXCHANGE-TRADED DERIVATIVES MARKET Supply Side(1) Simplification of listing procedures Listings of derivatives linked to new underlying assets, which currently requires the FSC’s approval, will be streamlined. Relevant rules will be revised to allow the KRX to decide on the listings of new derivative products, while the FSC will only approve the scope of the underlying assets. (2) Di
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Nov 13, 2016
- Seven Investors Were Picked to Buy Government's Stake in Woori Bank
- *Please read the attached file for details.The government decided to sell its 29.7% stake in Woori Bank to seven investors on its fifth attempt to privatize Woori Bank since 2010. The seven final winning bidders and amount of shares auctioned to each bidder are as follows: Investors % of auctioned shares1 Eugene Asset Management 4.0%2 Hanwha Life Insurance Co., Ltd. 4.0%3 IMM Private Equity, Inc. 6.0%4 Kiwoom Securities Co., Ltd. 4.0%5 Korea Investment Securities Co., Ltd. 4.0%6 Mirae Asset Global Investments Co., Ltd. 3.7%7 Tongyang Life Insurance Co., Ltd. 4.0%The government would recoup KRW 2.4 trillion from this sale, recovering a total of KRW 10.6 trillion out of KRW 12.8 trillion, which is 83.4% of the public funds injected into Woori Bank. We will continue our effort to sell the remaining 21.4% in Woori Bank for a full recovery of the public funds. The sale will be closed in mid-December this year. The Korea Deposit Insurance Corporation (KDIC) will terminate its MOU with Woori, signed for helping normalizing the bank’s business operation, as soon as the sale is closed, to guarantee the new shareholders autonomy in the bank’s management.
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Nov 10, 2016
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Nov 09, 2016
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Nov 07, 2016
- FSC Holds Emergency Meeting on Financial Markets
- FSC Chairman Yim Jong-Yong convened an emergency meeting with top officials from the FSS and other relevant financial organizations to respond to recent uncertainties in financial markets at home and abroad. Followings are key messages from his opening remark: The Korean economy is now facing internal and external challenges with slump in exports; slow recovery in domestic consumption; and household and corporate debt risks. However, our economy has sound fiscal health and strong fundamentals to weather these challenges. The government maintains fiscal soundness with its debt-to-GDP ratio of 35.5% at the end of 2015, which is the 4th lowest among 31 OECD countries. South Korea has the world’s 7th largest foreign currency reserve. Its short-term external debt accounts for only 29% of the foreign currency reserve, as of the 2nd quarter of 2016, which is much lower than 74% at the end of 2008. The financial system is resilient enough in terms with capital adequacy and asset soundness of financial institutions. The government will stay alert to internal and external uncertainties and take bold and preemptive measures, if necessary, to prevent any of risk factors from spilling over into a wider financial system to threaten our economy. Starting from today, the FSC and the FSS go into an emergency operation mode with a 24-hour monitoring on financial markets, in a close cooperation with the Ministry of Strategy and Finance, and the Bank of Korea. If necessary, we will take market stabilizing measures in accordance with contingency plans in a timely manner. We will continue to respond to household and corporate debt risks in a preemptive manner. For household debt, the government will continue our effort to improve soundness of household debt by holding the principle of ‘debt should be borrowed within repayment ability and paid back in installments.’ We will also closely monitor and respond to rapid growth of household debt in non-banking sectors. For ong
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Sep 26, 2016