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Jun 08, 2016
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May 24, 2016
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May 20, 2016
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Apr 26, 2016
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Mar 30, 2016
- FSC Announced CCyB Rate for Korea
- The Basel Committee on Banking Supervision set global regulatory standards of bank capital adequacy and liquidity, including Countercyclical Capital Buffer (CCyB), on December, 2010, in order to protect the banking sector against excessive aggregate credit growth that have often been associated with the build-up of systemic risks. Therefore, the Financial Services Commission established the domestic regulatory basis for CCyB on December 16, 2015, with the amendment to the Regulation on Supervision of Banking Business.The FSC announced its first CCyB rate for banks and bank holding companies in Korea, with effect from March 31, 2016. At present, the buffer rate is set at 0% considering the current sequence of credit-to-GDP gap, macroeconomic conditions, coordination with relevant fiscal and monetary policies, and the current CCyB implementation cases of the other countries.The FSC will continue to check whether the Korean banking sector is in an appropriate position in light of the current credit growth and system-wide risks, and will adjust the buffer rate if necessary. Furthermore, the FSC will conduct its quarterly review based on analyses and data provided by Financial Supervisory Service, in which the result will be shared with the policy-relevant institutions, such as Ministry of Strategy and Finance and the Bank of Korea.*Please read the attached file for details
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Mar 24, 2016
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Mar 14, 2016
- Introduction of Korea's Individual Savings Accounts (ISAs)
- Korea’s Individual Savings Accounts (ISAs) were introduced on March 14, 2016, in which individuals can invest into various financial products such as savings, funds and derivative-linked securities. Previously, individuals had to open separate accounts for each financial product. The introduction of ISAs is expected to help individuals build an investment portfolio tailored to their risk appetite and investment purpose and manage their wealth more efficiently with the aid of asset management experts. ISA products are now on sale starting from March 14 through branches of 33 financial institutions – banks, securities firms and insurers. TYPES OF ISASThere are two types of ISAs: a trust-type product and a discretionary investment product. ▪ Trust-type ISAs The trust-type ISA is aimed at individuals who want to choose financial products to be included into their accounts on their own. Without the account holder’s direction, financial institutions cannot change the composition of investment portfolio. ▪ Discretionary ISAs The discretionary ISA is targeted for those who want to let asset managers manage their money. Financial institutions provide clients with model portfolios, considering their risk appetite and investment purpose. The client is then supposed to pick one of the model portfolios to let asset managers on behalf of them choose products to be included in the account. Without the account holder’s direction, financial institutions are allowed to rebalance assets within the account every quarter, evaluating profitability and safety of such assets. ※ Since only one ISA is allowed per person, individuals have to choose either a trust-type ISA or a discretionary ISA, considering which type of the ISAs is more suitable for themselves. WHAT PRODUCTS CAN BE INCLUDED IN ISAS▪ Savings products – savings and installment savings with banks and mutual savings banks; deposits with mutual financial institutions; and RPs▪ Investment products – public of
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Mar 09, 2016
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Feb 10, 2016
- FSC Chairman Convenes an Emergency Meeting on Feb. 10
- FSC Chairman Yim Jong-yong convened an emergency meeting of high-ranking FSC officials on February 10 to make sure policy measures are in place amid growing market concerns over the recent developments in financial markets at home and abroad. RECENT MARKET DEVELOPMENTSGlobal stock markets have shown increased volatility with a rebound in oil prices, the prospect of deteriorating profitability for European banks and the strengthening of the yen, while major Asian markets including Korea were closed for the Lunar New Year holiday. On the domestic front, geopolitical risks including North Korea’s missile launch on February 7 could heighten anxiety over Korea’s financial market to be open on Thursday, February 11. POLICY RESPONSESThe missile launch is likely to have little impact on Korea’s financial market, given its calm response to North Korea’s previous provocations. However, the FSC will stay alert to any possibility of further escalation and closely monitor financial market conditions to prevent such geopolitical risks from combining with risk factors in global financial markets to weigh on our financial market. Particularly, we will look into policy implications of recent developments in major financial markets such as Europe, Japan, China and the U.S. to come up with policy responses, if needed. There is also a need for investors to respond calmly to recent market uncertainties with a longer-term view, rather than overreact out of anxiety. The government will thoroughly review and fine-tune contingency plans to ensure prompt and preemptive actions against any possible crisis. FINANCIAL AID TO COMPANIES OPERATING AT THE KICThe FSC will offer swift and sufficient financial aid to the companies operating at the Kaesong Industrial Complex (KIC) to minimize their possible losses from the shutdown of the KIC operation after North Korea’s missile launch. Those companies will be granted a roll-over for their maturing loans and cuts in interest rates and fees u
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Feb 04, 2016
- FSC Convenes Meeting over Recent Developments in Global Financial Markets and Policy Response
- The FSC convened a meeting with the FSS and relevant research institutions to review policy implications of recent developments in global financial markets and discuss our policy responses. There are growing uncertainties in the global economy this year with a slowing Chinese economy and falling oil prices. The IMF cut its outlook for global economic growth in 2016 from 3.6% to 3.4%. As global economic conditions weighed on our economy, Korea’s exports dropped 18.5% in January compared with the previous month, raising concerns about the country’s economic slowdown. In response to such worries, the Korean government announced yesterday a stimulus plan including an injection of KRW 21trillion in the first quarter of this year through fiscal spending and policy financing in a bid to boost domestic demands and create more jobs. Global financial markets are also facing increasing volatility with Fed’s rate hike, China’s financial market turmoil and declining oil prices. The Fed’s rate increase last December has led to contraction in global liquidity, while accelerating capital outflows from emerging economies to advanced economies. Monetary policies among major central banks have become divergent as the BOJ cut its interest rates to minus 0.1 per cent last week, joining in the ECB’s move to negative interest rates. The ECB also hinted a possibility of further quantitative easing. Compared with major economies, Korea’s financial market stayed stable; however, volatility has recently increased to some extent in the local stock and currency markets. With increased volatility in global financial markets, foreigners’ selling of Korean stocks has continued from last June until early this year. Fluctuations in the currency market have also increased with the won-dollar exchange rate surging to 1,219.3 won yesterday, a record high since July 2010. There is no quick fix for current global market risks, which are likely to persist for a considerable period of this
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Feb 02, 2016
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Feb 01, 2016
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Jan 21, 2016
- HSCEI-Linked ELS Market Conditions and Policy Response
- The FSC held a press briefing on HSCEI-linked ELS market conditions and its policy response as the benchmark index sharply fell to 8,015.44 on January 20, raising concerns over increasing volatility in the market. The outstanding balance of HSCEI-linked derivative products decreased from KRW 37.1trillion in September 2015 to KRW 37trillion as of January 19, 2016. ▪ Outstanding balance of HSCEI-linked products: KRW 35.8trillion (June 2015) → KRW 37.1trillion(Sept. 2015) → KRW 37.0trillion (Jan.19, 2016)Recent sharp falls in the index triggered “knock-in” for some HSCEI-linked ELS products; however, that does not necessarily mean investors’ losses. Most ELS products are structured to pay investors previously-agreed profits if the index recovered to certain levels even after the index fell below knock-in levels. Out of the outstanding HSCEI-linked ELS, 96.7% will reach maturity after 2018; if the HSCEI recovered in the meantime, therefore, it would not incur losses to investors. The FSC sees that further falls in the index will be unlikely to threaten soundness of brokerage firms which raised capital through HSCEI-linked ELS issuance. The average NCR of domestic brokerage companies stands at 486.7% at the end of September 2015, up 19.5 %P from 467.2% in June 2015 when Chinese stock market turmoil had not yet occurred. In addition, for capital raised through HSCEI-linked ELS, brokerage companies are hedging against volatility of the underlying index. As volatility in the HSCEI increases, the FSC will strengthen monitoring and supervision on the ELS market. To make sure brokerage firms manage their capital raised through ELS issuance in a sound and transparent manner, the Regulation on Financial Investment Business will be amended to separately handle such capital from other proprietary assets in accounting. We will keep monitoring whether brokerage firms properly manage hedging assets. We will examine sales practice of ELS products, particularly checking whe
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Jan 19, 2016
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Jan 14, 2016
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Jan 13, 2016
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Jan 07, 2016
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Jan 06, 2016
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Jan 05, 2016
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Dec 30, 2015