The Financial Services Commission announced on July 15 that it has approved the recovery plans prepared by ten domestic systematically important financial institutions (D-SIFIs) selected for 2026 and their resolution plans drawn up by the Korea Deposit Insurance Corporation (KDIC) as recommended by the Financial Stability Board (FSB). The recovery and resolution mechanisms were adopted through a revision to the Act on the Structural Improvement of the Financial Industry (“the Act” hereinafter) in December 2020 and have been in place since 2022 requiring FSC’s approval every year.

The FSC found that the recovery and resolution plans for ten D-SIFIs selected for 2026—Shinhan, KB, KEB Hana, Woori, and NongHyup financial holding companies and their banks—mostly meet international standards and those prescribed under the Act. Certain factors that came across as requiring improvement in the resolution process, especially in the areas of cybersecurity and digital bank run, have been notified to D-SIFIs and the KDIC.

Compared to the previous year, the recovery and resolution plans approved by the FSC this year carry tools and mechanisms enabling large financial companies to more actively prepare and respond to risk situations in advance, while allowing the resolution authority to more swiftly carry out resolution proceedings, thereby helping to ensure stability and resilience in the financial system in a more effective manner.

The recovery and resolution plans are operated on a yearly basis, and the authorities plan to review and approve the recovery and resolution plans for D-SIFIs selected for 2027 in the future. In the second half of this year, relevant authorities and D-SIFIs plan to hold a joint exercise to examine and bolster their risk response capabilities.

* Please refer to the attached PDF for details.