Press Releases - Financial Services Commission

Press Releases

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Nov 08, 2023

Government and Related Authorities Hold Meeting on Household Debt Situation

The Financial Services Commission held a meeting with officials from the relevant government ministries and organizations on November 8 and discussed the current household debt situation and various measures to ensure effective management. Regarding the October household loans data announced earlier today, the participants had a positive assessment about the slowing trend of mortgage loans, despite an overall increase in the size of household loans from the previous month. To continue to ensure a stable management of household loans, the authorities agreed on the need to strengthen relevant measures as follows. First, the authorities will bolster rules on debt service ratio (DSR) by closely reviewing the areas that are currently being exempted from DSR regulation and look into ways to gradually expand the application of DSR rule. The stressed DSR limit that is currently being reviewed for application on variable interest rate loans is expected to be announced in December this year with specific details. Second, the authorities will come up with stronger incentive structures that can reward banks to more actively and voluntarily introduce long-term, fixed interest rate mortgage loans by overhauling a relevant administrative guidance. The authorities will also seek to provide more incentives for covered bonds, which serve as a mechanism for banks to fund long-term, fixed rate loans. Third, the authorities will continue to keep close tabs on the trends of household loan growth across all financial sectors. Fourth, the authorities will work with financial sectors to come up with various ways to help reduce the burden of repayment and high interest rate for borrowers, for instance, by offering a temporary exemption from early repayment charges. At the meeting, FSC Secretary General Lee Se-hoon said that as it is difficult to achieve short-term results when it comes to containing household debt, the government will make efforts with a long-term perspective to build an inc
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Nov 08, 2023

Household Loans, October 2023

The outstanding balance of household loans across all financial sectors increased KRW6.3 trillion in October 2023 (preliminary), rising at a faster rate compared to the previous month. * Change (%, y-o-y): +0.1 (Apr 2023), +2.6 (May), +3.2 (Jun), +5.2 (Jul), +6.1 (Aug), +2.4 (Sep), +6.3 (Oct) (By Type) Mortgage loans grew at a somewhat slower rate while other types of loans expanded at a faster pace. Home-backed mortgage loans rose KRW5.2 trillion as nonbanks saw a drop of KRW0.6 trillion and the pace of growth in the banking sector also declined from KRW6.1 trillion a month ago to KRW5.8 trillion. Other types of loans rose KRW1.1 trillion with a low base effect from the previous month (down KRW3.3 trillion). (By Sector) Household loans expanded more rapidly in the banking sector while the pace of decline in the nonbanking sector slowed from a month ago. Banks saw an increase of KRW6.8 trillion of household loans in October, going up from KRW4.8 trillion a month ago. Mortgage loans went up KRW5.8 trillion in the banking sector, mainly led by policy mortgage loans. Other types of loans rose KRW1.0 trillion in the banking sector with credit loans edging up KRW1.2 trillion from a drop of KRW1.3 trillion in the previous month due to seasonal factors such as moving season and demand for IPO subscription. In the nonbanking sector, household loans dropped KRW0.5 trillion overall, showing a slowing pace of decline from the previous month (down KRW2.5 trillion). Specialized credit finance businesses (up KRW0.7 trillion), insurance companies (up KRW0.4 trillion) and savings banks (up KRW0.1 trillion) saw household loans going up, while mutual finance businesses continued to see a decline (down KRW1.7 trillion). Although the accelerated pace of household loan growth in October appears to be caused by a low base effect from a month ago, the financial authorities will continue to closely monitor trends and ensure close management of the growth level. Meanwhile, the authorities p
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Nov 06, 2023

FSC Selects 10 Outstanding Fintech Firms for 'K-Fintech 30'

The Financial Services Commission announced on November 6 that the authorities have selected 10 innovative fintech businesses as the first batch of the K-Fintech 30 program, which aims to provide comprehensive funding and consulting support to a total of 30 outstanding fintech firms selected until 2025. For this round, the selected fintech businesses are Moin, Village Baby, SentBe, CTech, Akros Technologies, Aizen Global, Aims, Fount, Fin2B and Hanpass. At this round of selection for ten businesses, a total of 52 promising fintech firms competed to secure a spot, and the selection results have been drawn from a thorough review on the innovativeness and growth potential of their business models assessed by an expert committee. On average, the selected fintech firms were found to be in operation for 6.6 years, had annual earnings of about KRW5.55 billion, employed 57.1 persons and secured KRW18.0 billion in investment (as of July 2023). The selected fintech businesses will be able to benefit from a series of scale-up assistance programs, including various policy funding support opportunities, relevant financing services offered by individual financial companies, greater opportunities to secure investments and pitch their business ideas through IR events, fintech-focused counseling and support for overseas business expansion. More specifically, they will be eligible to receive various preferential lending benefits offered by policy financial institutions, such as reductions in interest rates and guarantee fees. Individual financial companies are also planning to provide support packages linked with their own fintech lab programs. The Korea Growth Investment Corporation and D-Camp will provide assistance to match innovative fintech businesses with investors and help them with IR opportunities. Lastly, the 10 selected fintech firms can also take advantage of other supports made available, such as consulting support for those applying for the financial sandbox program, as
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Nov 05, 2023

FSC Decides to Ban Stock Short Selling Until June 2024 and Seek Measures to Improve the System

The Financial Services Commission held a meeting on November 5 where the authorities decided to ban all stock short selling in domestic markets (all KOSPI, KOSDAQ and KONEX listed items) effective from Monday, November 6, 2023 until the end of June 2024. With the continuation of high interest rate environment and stagnant growth in the global economy, coupled with geopolitical risks such as the armed conflict between Israel and Hamas, there are growing uncertainties for the Korean economy. In particular, during the second half of this year, stock market volatility in domestic stock markets has risen to much higher levels compared to other major markets overseas,which caused anxiety in the market. Despite a series of measures introduced in the past,recently, the authorities have discovered a number of illegal naked short selling practices conducted by foreign and institutional investors, raising concerns about the fair pricing function of domestic stock markets. Recently, a large-scale naked short selling case involving global investment banks was detected, and an investigation is currently taking place with discovery of additional unlawful activities. As such, the FSC finds that the situation with illegal short selling is very dire as it can erode the fair pricing function of the market and degrade confidence in the market. Therefore, considering the need to preemptively respond to the rising market uncertainties and address concerns about the potential weakening of the markets fair pricing function, and with the practice of illegal naked short selling taking place in a more routine way, the FSC decided to ban short selling on all domestic stock items until the end of June next year. Meanwhile, during the period of banning short selling, the government will work on proactive measures to improve the system in a way that will help to root out illegal short selling activities when short selling resumes thereafter. In this regard, first, the authorities will work on mea
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Nov 01, 2023

FSC Approves Rules Change Intended to Boost Loss Absorbing Capacity of Banks

The Financial Services Commission approved a partial revision bill of the supervisory regulation on banking business at the 19th regular meeting held on November 1. Under the revised rules, the financial regulators will be authorized to ask banks to set aside special reserve for credit loss. The revision also establishes a process of inspecting banks own estimated loss forecasting models. This is a follow-up to the previously announced plan to revamp prudential regulations in the banking sector. First, the rules change will establish a regulatory ground authorizing the financial regulators to ask banks to set aside additional loss reserve when their accumulated level of loan loss provision and loss reserve are deemed to be inadequate. With the lack of regulatory grounds allowing the authorities to make such a request from banks, the Financial Supervisory Service (FSS) had to seek cooperation from banks to bolster their loss provisioning on a voluntary basis so far. However, from now on, the FSC will have an authority to demand banks to set aside additional loss reserve when deemed necessary. Making an actual request from banks to bolster special loss reserve will be carried out through an FSCs formal deliberation process. Second, the rules change will establish a process whereby the authorities are able to inspect banks models for forecasting their estimated loss, so that the authorities can verify the appropriateness of loss provisions prepared by individual banks and have them prepare loss provisions at levels suitable to their estimated future losses. Currently, banks loss provisions are prepared based on their own estimated loss forecasting models. However, the banks own estimates raised concerns about the appropriateness of their estimated losses in the post-pandemic period as their loss calculation was based on the low interest rate environment where delinquency ratio also stayed low. Therefore, from now on, banks will carry out self-inspection on the appropri
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Oct 31, 2023

FSC Proposes Rules Change on the Maximum Level of Credit Extension Allowed for Foreign Subsidiaries

The Financial Services Commission proposed a revision to the supervisory regulation on financial holding companies on October 31, which will be open for public comment from October 31 to November 10, as a follow-up to the previously announced plan to ease rules on overseas subsidiary ownership of financial companies. Under the current rule, financial companies within a holding group are allowed to extend credit to their own subsidiaries at the maximum level of 10 percent of equity capital to each individual subsidiary. The total sum of credit extended to subsidiaries should not exceed 20 percent of equity capital. However, for financial holding companies overseas subsidiaries, which often face challenges in raising funds at an early stage due to low credit background and lack of collateral, this rule on credit extension between financial companies within a holding group has placed restrictions on their ability to raise funds even from their domestic affiliates. Therefore, this revision proposal will increase the maximum level of credit extension allowed by a financial company to its foreign subsidiary within additional 10 percentage points from the current level for a period of maximum three years from the time the foreign subsidiary becomes a part of the holding group. This revision proposal will be available for public comment from October 31 to November 10 and go into effect from January 1, 2024 after a deliberation by the FSC. * Please refer to the attached file for details.
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Oct 19, 2023

Revised Guidelines on Corporate Governance Disclosure

I. Overview and Progress of the System Corporate governance disclosure was introduced to encourage listed companies to voluntarily enhance their corporate transparency. Companies are required to disclose their compliance with the core principles of corporate governance and explain* the reasons for non-compliance based on a Comply or Explain approach. * The guidelines present a generally recommended corporate governance structure, such as those in the G20/OECD Corporate Governance Principles, allowing companies the discretion to select a governance structure that suits them, while requiring them to provide explanations for non-compliance (10 core principles, 28 detailed principles). Corporate governance disclosure was voluntary when it was first introduced in Korea by the Korea Exchange (KRX) in 2017. In 2019, it became mandatory for KOSPI-listed companies with total assets of KRW2 trillion or more, and in 2022, the scope of companies subject to mandatory filing was expanded to KOSPI-listed companies with total assets of KRW1 trillion or more. * A review at the end of 2022 showed that the average compliance rate for key indicators among companies with assets of KRW2 trillion or more significantly improved from 63.5% in 2021 to 66.7% in 2022. This was evaluated as a positive contribution to enhancing corporate transparency. ** [Schedule] (2019) Total assets of KRW2 trillion or more (2022) KRW1 trillion or more (2024) KRW500 billion or more (2026) All KOSPI-listed companies In 2019, the KRX established the guidelines on corporate governance disclosure, providing core principles of corporate governance and detailed reporting standards to ensure that companies provide faithful and comparable information in their disclosures. The guidelines were revised in 2020 and 2022 to reflect market conditions. II. Background and Key Details of the Revision The revision of the guidelines incorporates feedback received during the implementation of corporate governance disclosure in li
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Oct 18, 2023

FSC Holds Meeting to Check Financial Market Situation

The Financial Services Commission held a meeting with the Financial Supervisory Service and industry representatives on October 18 to review financial market situations, potential risk factors and ways to handle them, chaired by FSC Vice Chairman Kim So-young. At the meeting, the authorities shared the same view that there are ongoing risk factors in financial markets due to the possibility of continuing high interest rates caused by a prolonged policy tightening in the U.S. and uncertainties surrounding the Israel-Hamas conflict. Therefore, the FSC, the FSS and financial industry groups agreed to maintain strong communication and cooperation. Despite these downside external risks, Vice Chairman Kim said that the domestic financial market conditions appear to be stable and that it is very unlikely that market situation will abruptly turn unstable as in the previous year since there are less uncertainties about the interest rate expectation in major economies and the financial institutions liquidity and risk management conditions have been improved compared to a year ago. However, as it is always possible that an external shocksuch as the one caused by the Israel-Hamas warcan deepen market anxiety when combined with vulnerabilities in domestic markets, Vice Chairman Kim said that it is necessary to continue to proactively deal with the vulnerable areas in domestic financial markets. With regard to the uncertainties surrounding the Israel-Hamas conflict, Vice Chairman Kim urged financial institutions to stay vigilant and secure a sufficient level of foreign currency liquidity to be adequately prepared. At the meeting, the authorities also discussed ways to avert excessive money moves in the financial sectors in the final three months of the year as competition to win over more deposits toward the end of the year led to market instability last year. In this regard, from September this year, the FSC and the FSS held a series of meetings with the financial sectors to che
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Oct 16, 2023

Taskforce on ESG Finance Holds Meeting to Discuss Ways to Introduce ESG Disclosure System

The Financial Services Commission held the third meeting of the taskforce on promoting ESG finance on October 16. Set up in February this year, the taskforce on ESG finance consists of representatives from businesses, investors, academia, experts and relevant institutions, and is aimed at exploring various policy tasks on the issues encompassing ESG disclosure, assessment and investment. At todays taskforce meeting, the authorities discussed the roadmap for introducing an ESG disclosure system in domestic market. In opening remarks, FSC Vice Chairman Kim So-young spoke about the significance and the underlying principle of introducing an ESG disclosure system in Korea. The following is a summary of Vice Chairman Kims remarks. First, introducing an ESG disclosure system in domestic market is important as this will help to improve domestic firms ability to adapt to the strengthened ESG regulatory environment overseas. As domestic firms are both directly and indirectly affected by global value chains, it is necessary to lay a regulatory foundation to help them adjust to the strengthening of relevant regulations in major overseas markets. Second, introducing an ESG disclosure system can make contributions for a sustainable growth of our economy and industries. This will also help our economy make a transition from the one centered on quantitative growth to the one driven by qualitative growth. Third, introducing an ESG disclosure system will induce domestic firms to seek more technological innovation in line with the shifting global paradigm toward digital transformation and low carbon society. In this regard, establishing rules on ESG disclosure will take into account the standards set forth by major economies and international organizations and give ample considerations for particular characteristics of domestic market and businesses. Second, applying the ESG disclosure rules on businesses will take place in phases, starting with large listed companies first and then
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Oct 16, 2023

Authorities Propose Measures to Improve Pet Insurance Services

The Financial Services Commission introduced a set of proposed measures that will help bring about improvements to pet insurance services on October 16, announced jointly with the relevant government ministries. The measures to improve pet insurance services are intended to address the following(a) ensuring stable operation of pet insurance services based on a reasonable veterinary fee rates system; (b) creating a one-stop service enabling pet owners to sign up for pet insurance, file for insurance claims; manage health conditions of their pets and register their pets all from a single place; (c) improving the structure of pet insurance products and developing new products tailored to the needs of pets and their owners; and (d) allowing insurers specializing in pet insurance to operate in the market. The FSC and the Ministry of Agriculture, Food and Rural Affairs will continue to maintain close communication with the relevant authorities and industries to ensure effective implementation of the proposed measures. In this process, the authorities will particularly work on boosting cooperation between the veterinary and insurance industries in order to bring about improvements and reduce inconveniences in the provision of veterinary and pet insurance services to consumers. * Please refer to the attached file for details.
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Oct 12, 2023

FSC Undertakes Organizational Reshuffle to Bolster Financial Data Security

The Financial Services Commission announced that an internal organizational adjustment creating a division (Cyber and Information Security Division) tasked with overseeing financial data security and information protection will take effect from October 13. Amid an accelerated pace of digital financial innovation taking place with the introduction of advanced technology such as artificial intelligence in financial services, diversification of payment methods and increased utilization of data, there are growing needs for the authorities to strengthen the function of data security and information protection. Thus, the FSC will reorganize the current Electronic Finance Division into Cyber and Information Security Division in order to bolster the management of risks related to financial data security and strengthen financial data protection. The Cyber and Information Security Division will be in charge of overseeing tasks related to electronic finance security, responding to electronic finance-related accidents, preventing fraudulent activities such as vishing, making policies on financial data privacy and protection of personal credit data, and establishing measures for ensuring stability and security in digital finance infrastructures. The task of managing and overseeing electronic financial businessesfor instance, granting approval and registrationthat was previously handled by the Electronic Finance Division will be transferred to and carried out by the Financial Data Policy Division. In seeking to promote digital financial innovation, the FSC expects that this organizational reshuffle creating the Cyber and Information Security Division will help the authorities to more effectively and thoroughly deal with the issues related to ensuring the system stability of digital finance and strengthening financial data protection. * Please refer to the attached file for details.
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Oct 12, 2023

Government and Related Authorities Hold Meeting on Household Debt

The Financial Services Commission held a meeting to discuss the current household debt situation with officials from the relevant government ministries and organizations on October 12. In September (up KRW2.4 trillion), household debt growth decelerated significantly compared to the previous two months (up KRW5 trillion to KRW6 trillion). However, as the slowdown in the trend of household debt growth could have been affected by temporary and seasonal factors, such as a drop in credit loans due to inflows of Chuseok holiday bonuses and the end-quarter write-off of bad debt by specialized credit finance businesses, the authorities concluded that it is necessary to continue to monitor the trends for some time to determine whether the current slowdown can be seen as a sustained one. In the banking sector, both individual mortgage loans and policy mortgage loans expanded at notably slower rates backed by the household debt management measures taken by the financial authorities. The pace of decline in other types of loans also expanded. In particular, with borrowers repayment capabilities being reviewed more strictly, the amount of newly issued 50-year mortgage loans dropped from KRW4.8 trillion in August to KRW4.2 trillion in September. The authorities expect that the strengthened long-term mortgage lending measure will start to have fuller effect beginning in October. The nonbanking sector also saw a larger decline in household loans (down KRW0.8 trillion in August down KRW2.5 trillion in September) due to increases in market rates and inflows of holiday bonuses. The authorities had a favorable assessment about the latest household debt statistics, but shared the same view on the need to continue to closely manage the pace of household debt growth as it can be influenced by housing market and interest rate situations. Therefore, the financial authorities will promptly implement the household debt management measures (such as introducing a stressed DSR limit within this
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Oct 12, 2023

Household Loans, September 2023

The outstanding balance of household loans across all financial sectors rose KRW2.4 trillion in September 2023 (preliminary), growing at a slower rate than the previous month. Compared to a year ago, household loans dropped 0.3 percent. * Change (in trillion KRW): +0.2 (Apr 2023), +2.8 (May), +3.5 (Jun), +5.3 (Jul), +6.1 (Aug), +2.4 (Sep) (By Type) Home mortgage loans continued to grow but at a slower rate, while other types of loans fell at an expanded level. Mortgage loans rose KRW5.7 trillion overall with a fall of KRW0.4 trillion in the nonbanking sector and an increase of KRW6.1 trillion in the banking sector. Mortgage loans from banks expanded at a slower rate compared to the previous month (up KRW7.0 trillion). Other types of loans dropped KRW3.3 trillion overall with declines seen from both the banking (down KRW1.3 trillion) and nonbanking (down KRW2.1 trillion) sectors. (By Sector) Household loans grew at a slower rate in the banking sector, while decreasing at a faster rate in the nonbanking sector. Banks saw a rise of KRW4.9 trillion of household loans in September, down from an increase of KRW6.9 trillion in the previous month. Mortgage loans in the banking sector grew KRW6.1 trillion overall with group lending for new apartment subscription (up KRW0.3 trillion) and jeonse loans (up KRW0.1 trillion) going up at slightly faster rates and individual mortgage loans (up KRW3.6 trillion) and policy mortgage loans (up KRW2.1 trillion) rising at slower rates. Other types of loans declined KRW1.3 trillion as credit loans dropped at a faster rate (down KRW1.2 trillion). Household loans in the nonbanking sector dropped KRW2.5 trillion overall, edging down at a faster rate than the previous month (down KRW0.8 trillion). Insurance companies (up KRW0.3 trillion) saw an increase in household loans, but mutual financial companies (down KRW1.9 trillion), savings banks (down KRW0.1 trillion) and specialized credit finance businesses (down KRW0.8 trillion) all saw drops i
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Oct 10, 2023

KoFIU Unveils H1 2023 Survey Result on Virtual Asset Service Providers

The Korea Financial Intelligence Unit (KoFIU) conducted a survey on 35 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) 35 VASPs (26 exchange service providers and 9 other businesses) (Survey Method) Data collected from VASPs (Period Covered) January 1, 2023 to June 30, 2023 Key Survey Findings for H1 2023 The domestic market for virtual assets in H1 2023 saw increases in terms of market capitalization, deposit (in KRW) and the exchange service providers operating profits as virtual asset prices rose and investment sentiment recovered. Among 21 coin-only exchange service providers, continuing business operation appears to be difficult for 10 of them as they showed no record of sales from transaction fees. The market capitalization at the end of June 2023 stood at KRW28.4 trillion, up 46 percent from KRW19.4 trillion at the end of 2022. In the same period, the amount of deposits (in KRW) also increased to KRW4.0 trillion, up 11 percent from KRW3.6 trillion at the end of 2022. The operating profits of VASPs amounted to KRW227.3 billion in the first half of 2023, up 82 percent from KRW124.9 billion during the previous six months. According to the survey, the frequency of new coin listings and trading suspensions (due to delisting) also increased. There were 169 new virtual asset listings in the first half of 2023, up 128 percent from 74 new listings in the previous six months. The number of delisted coins also rose during the same period from 78 in H2 2022 to 115 in H1 2023. There were 622 different types of virtual assets being circulated in the domestic market in H1 2023 and 366 of them were virtual assets listed exclusively by single exchange service providers. Despite a recovery seen in the virtual asset market, the volume of domestic virtual asset transactions and the number of users declined somewhat. Between H2 2022 and H1 2023,
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Oct 05, 2023

FSC Holds Meeting to Ensure Seamless Implementation of Financial Measures Intended to Boost Housing Supply

The Financial Services Commission held a meeting with related government ministries, policy financial institutions and financial industry representatives on October 5 to check the implementation plan of the financial measures announced earlier on September 26 that are intended to boost housing supply. At the meeting, the authorities discussed (a) ways to expand the supply of project finance (PF) lending support by policy financial institutions, (b) the current situation in preparing the real estate PF market normalization fund and (c) establishing an oversight and management system to enhance the effectiveness of the measures. Expanding policy financial institutions supply of PF lending support The Korea Housing Finance Corporation (HF) and the Korea Housing Urban Guarantee Corporation (HUG) have each raised the size of PF guarantees available by KRW5 trillion for a total of KRW10 trillion in additional guarantee capacity. The policy financial institutions (Korea Development Bank, Industrial Bank of Korea and Korea Credit Guarantee Fund) will begin to supply KRW7.2 trillion or more from this month to ensure stability of real estate development projects and construction firms. In addition, Construction Guarantee (CG) is currently preparing to make available KRW6 trillion worth of guarantee support programs intended to help construction companies engaged in non-housing (non-apartment) development projects. Until the end of this year, the five major financial holding companies will continue to make available about KRW4 trillion in lending supports for the real estate development projects currently operating. Real estate PF market normalization fund At the meeting, the authorities went over the current situation in creating a real estate PF market normalization fund in the size of KRW2.2 trillion, which is intended to supply funds necessary for normalizing and restructuring of illiquid or at-risk projects. First, a matching fund raised by the Korea Asset Management Corp
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Oct 04, 2023

FSC Chairman Visits Japan with Aims to Strengthen Bilateral Cooperation in Financial Sectors

Chairman Kim Joo-hyun of the Financial Services Commission visited Japan from October 2 to 4 in a move to strengthen bilateral cooperation in financial sectors. On his trip, Chairman Kim held a meeting with his Japanese counterpart at the Financial Services Agency (FSA) and agreed to resume the shuttle meeting between the financial authorities of two countries. Chairman Kim also took part in the Nikkei Sustainable Forum to deliver a speech and attended the first ever Korea-Japan collaboration startup fund launching event and held talks with Korean financial companies doing business in Japan. Meeting with Korean financial companies operating in Japan While meeting with the Korean banks, insurance companies and financial investment businesses operating in Japan, Chairman Kim held talks on the financial industry and market situation in Japan, business operation of each company and their challenges and suggestions. Emphasizing on the need to have active cooperation from the private sector, Chairman Kim said that bilateral cooperation between Korea and Japan is expanding beyond the traditional security and diplomatic domains into other areas. By maintaining close communication with the FSA of Japan, Chairman Kim said that the FSC will work to resolve business challenges experienced by Korean financial companies doing business in Japan and actively support cooperation between financial companies of two countries. Nikkei Sustainable Forum Attending the Nikkei Sustainable Forum, which was held as part of the Japanese governments Japan Weeks event, Chairman Kim delivered closing remarks where he talked about the importance of strengthening financial cooperation between the two countries in the areas of startup and venture businesses where they have high growth potentials. Korea-Japan banking industry MOU and joint seminar Chairman Kim attended the Korea-Japan banking industry groups MOU signing event and joint seminar on green and digital transformation and delivered congrat
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Oct 03, 2023

Financial Authorities of Korea and Japan Agree to Hold Meetings Regularly

Chairman Kim Joo-hyun of the Financial Services Commission held a meeting with Japans Financial Services Agency Commissioner Teruhisa Kurita on October 3. The meeting between the chief financial authorities of two countries is the first time in eight years since 2015. After the meeting, the financial authorities of Korea and Japan released a joint press statement underlining the significance of the meeting as a start of resuming the so-called shuttle meeting between the financial authorities of two countries against the backdrop of a normalizing bilateral relationship between the two countries. Joint Press Release 1. The Chairman of the Financial Services Commission (FSC) of the Republic of Korea, KIM Joo-hyun and the Commissioner of the Financial Services Agency (FSA) of Japan, KURITA Teruhisa met in Tokyo today. 2. At the meeting, they agreed to resume the Shuttle Meeting and tomeet regularly between the financial authorities of the two countries. The meeting will be held in Seoul, Korea on December 19 and 20, 2023 and it will be the first meeting since 2016. 3. They agreed that sharing experiences and exchanging views on issues of their mutual interest, such as climate change and digitalization of financial services would be useful. They also discussed possible areas for deepening their cooperation aimed at safeguarding financial stability and fostering the financial markets of both countries. 4. They welcomed the Joint Seminar between the Japan Bankers Association and the Korea Federation of Banks held today, and hope the financial institutions of both countries to continue their constructive discussions towards further improvements in the quality of their financial services. * Please refer to the attached file for details.
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Sep 26, 2023

Government to Prepare Measures to Overhaul Rules on Mutual Financial Businesses

The Financial Services Commission held the 3rd consultative body meeting on mutual financial businesses with related government ministries and mutual financial businesses on September 26. At the meeting, the authorities decided to draw up a joint plan to overhaul and update the current regulatory framework on mutual financial businesses in line with the growth of the sector and changes in their operating environment. The authorities also decided to set up and operate a daily monitoring system from mid-October to closely check the liquidity condition of mutual financial businesses. In terms of the size of total assets, between end-2013 and end-June 2023, the mutual finance industry has grown from KRW475 trillion to more than KRW1 quadrillion, with some entities growing to the level equivalent to a commercial financial institution within a region. In addition, the nature of their operation has shifted as loans extended to households by mutual financial businesses declined in recent years, while the volume of corporate lending from them has expanded significantly. Considering this growth and change in the operating environment of mutual financial businesses, the authorities exchanged views on the need to shore up rules on their prudential management and governance structure. Amid ongoing concerns about the soundness and liquidity conditions of the mutual finance industry, the authorities also shared views on the need to strengthen risk management in vulnerable areas while ensuring the provision of prompt liquidity support if needed. With regard to the application of key consumer safeguard measures guaranteed under the Financial Consumer Protection Act, for which most mutual financial businesses other than credit unions are exempted, the authorities talked about the need to introduce safeguard measures even before they are put into relevant laws. Lastly, the authorities went over the liquidity condition of mutual financial businesses. Although it is stable currently, th
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Sep 25, 2023

CD Rate as Critical Benchmark Rate to Take Effect from October 2

The Financial Services Commission announced that the certificate of deposit (CD) rate as a critical benchmark rate under the Act on the Management of Financial Benchmarks will take effect from October 2. The disclosure of CD rates based on an updated calculation method will be available from October 4. In March 2021, the FSC selected the CD rate as a critical benchmark rate under the Act on the Management of Financial Benchmarks, and decided to designate Korea Financial Investment Association (KOFIA) as the administrator of critical benchmark rate in June 2023. Allowing a period of adjustment concerning the change in CD rate calculation method, the authorities granted a grace period of about three months. As the CD rate as a critical benchmark rate will take effect from October 2, financial institutions using CD rates will be required to provide explanation to investors about their use of critical benchmark rate for both new and renewal contracts. The KOFIA will begin to disclose CD rates using an updated calculation method starting from October 4. As this change in the critical benchmark rate takes place in the market, for the first six months, the financial authorities will focus on ensuring a seamless transition and adoption by financial institutions. * Please refer to the attached file for details.
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Sep 25, 2023

Online Loan Transfer Service to be Available for Housing Loans

The Financial Services Commission announced that the online loan transfer service will be available for mortgage loans for apartments and jeonseloans for all housing types, allowing borrowers to compare different rates online and make a switch to the one offering lower interest rates. From May 31, 2023, the online loan transfer systems service availability has been expanded to include individual credit loans. As of September 15, a total of 67,384 transfers have been made with the volume of loans reaching more than KRW1.58 trillion. On average, applicants received interest rate cuts of 1.5 percentage points, and their total annual saving in interest payments is estimated to be more than KRW30 billion. The borrowers who switched loans saw their credit scores increase, and there has been more competition between financial companies in lowering interest rates. Based on these favorable outcomes, the authorities plan to expand the service availability to include home-backed mortgage loans for apartments and jeonse loans for all housing types. Previously, the process of switching a mortgage loan or a jeonse loan was ridden with inconveniences, as there were no sufficient loan comparison platforms and due to the hassle of having to visit multiple financial institutions. To help remove these inconveniences, the authorities will develop an online loan transfer infrastructure for housing loans joined by about 19 loan comparison platforms and some 32 financial companies. Relevant information sharing between financial companies will take place to ensure a seamless loan transfer experience for consumers. The loan transfer infrastructure for housing loans is expected to be set up by the end of 2023 and open to public in stages beginning in January 2024. The authorities expect that this will bring about more choices for financial consumers and open up new opportunities for financial companies and fintech businesses. * Please refer to the attached file for details.
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