Financial stability is a prerequisite to innovation and inclusive finance policies. FSC maintains close market monitoring for any signs of market volatility and works to ensure stability in the financial markets. There are risk factors originating from abroad and from within. FSC focuses on making our economy more resilient from external shocks, such as a disruption in the global supply chain, and supporting Korea’s material, component and equipment industries to help boost their global competitiveness. Internally, FSC is closely monitoring the trends in household debt and seeking reforms to corporate restructuring in order to prevent domestic risk factors from turning into systemic risks. Policies aimed at increasing financial stability also include enhancing fairness in the financial markets by introducing a comprehensive legal framework for the supervision of financial conglomerates, improving market discipline and promoting transparency in corporate disclosure and accounting practices.
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Jan 18, 2022
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Jan 17, 2022
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Jan 13, 2022
- FSC Chairman Emphasizes Stability as Key Policy Priority in Meeting with Expert Group
- FSC Chairman Koh Seungbeom held a meeting with a group of experts on January 13 and discussed potential risk factors in domestic and overseas markets and ways to properly respond to them. The expert group consisting of academia, columnists and thinktank officials discussed various issues including the need to find a new equilibrium in policy mix, deepening market volatilities, the need to manage risks in the nonbank sector, loan loss provisions of financial institutions and the shifting paradigm in global value chains. In his keynote address, Chairman Koh stated that maintaining stability in the financial system remains as top policy priority for this year. The following is a summary of Chairman Kohs remarks. Chairmans Remarks From the second half of 2021, the financial authorities have been working on measures to prepare for potential risks in markets. The Feds monetary policy changes, continuing pandemic situation, a slowdown in Chinas economic growth and dispute between the U.S. and China can have impact on the Korean economy and financial markets. In response to these potential risks, the authorities have made efforts to build foundations for easing financial imbalances by bringing down growths in new lending and housing prices. To build upon these outcomes, the authorities will first and foremost work on stable management of household debt. Unlike the previous year where the focus was on controlling the total quantity of household debt, the focus this year will be on making systemic improvements through an expanded application of the individual debt service ratio rule, etc. In the meantime, the authorities will ensure that credit extension to the financially vulnerable groups remains available. Second, the authorities will work to minimize negative effects on vulnerable debtors such as small merchants and self-employed business owners in the process of policy normalization. Looming interest rate hikes amid a continuing pandemic situation can place extra burdens
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Jan 12, 2022
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Dec 27, 2021
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Dec 23, 2021
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Dec 15, 2021
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Dec 14, 2021
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Dec 09, 2021
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Dec 08, 2021
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Dec 07, 2021
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Nov 19, 2021
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Nov 03, 2021
- FSC Proposes Rules Change to Facilitate Overseas Business Operation of Financial Companies
- The FSC announced a plan for changing rules to facilitate financial companies business operation and investment activities in overseas markets on November 3. With a growing number of financial companies expanding their business operations overseas, financial companies foreign direct investment (FDI) activities in overseas markets have also grown.The volume of financial companies FDIs has grown in terms of both direct investment for establishing overseas branches and indirect investment through foreign funds. However, the current reporting rules have often caused unnecessary burden for financial companies in their overseas investment activities due to strict filing procedures, etc. As such, the FSC plans to change rules to simplify their reporting requirements and remove unnecessary burden. Key Details a) Currently, FDIs made through foreign funds are subject to the advance reporting requirement regardless of the investment amount. However, FDIs of USD30 million or less made through overseas branches can be subject to ex post facto reporting. Both FDIs made through foreign funds and FDIs made through overseas branches will be allowed for ex post factor reporting within one month for FDIs ofUSD20 million or less. b) Currently, financial companies investing ten percent or more in equity shares of foreign funds are required to report to the FSS about any changes in their ownership status even when changes in their equity shares occur due to changes in investment amounts made by other shareholders in proportion to their own shareholding. FDIs in foreign funds will be subject to the ten percent reporting rule only at the time of making initial investment and financial companies will be exempted from further reporting duties when changes in their shareholding occur without additional investments. c) Currently, some of the routine activities by financial companies overseas branches, such as equity trading or loan transaction of more than one year, are subject to reporting d
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Nov 03, 2021
- FSC Chairman Emphasizes Consumer Protection and Discusses Role of Insurance Business
- FSC Chairman Koh Seungbeom held a meeting with the heads of insurance companies and relevant officials on November 3 and discussed the role of insurance business and importance of consumer protection. Chairmans Remarks Rapid changes taking place in the structure of demographics, rising interest rates, digital transformation and spread of platform businesses are demanding innovation from the insurance industry. In order to build a foundation for the future of the industry, it is necessary to look at the scope of insurance coverages, the sales and payout process and so on. To help promote further development of the insurance industry, the authorities provide support in the following areas. First, the authorities will provide active support for insurance companies to help strengthen the function private-sector safety net in response to demographic change. The authorities will set up a public-private joint consultative body to formulate measures for improving the indemnity health insurance system. To preemptively respond to newly emerging risks, such as the spread of infectious disease, the government will enhance inter-agency coordination to promote insurance on transmissible diseases. In addition, the authorities will look into ways to strengthen the role of pension insurance to address rapid demographic changes. Second, the government will support diversification of insurance business and their organizational models to help insurers better cope with the changing environment. Specific measures will be prepared to ease the current licensing rules to reflect diversification of consumer needs and insurance products. While continuing to work on introducing small-sum and short-term insurance products, the authorities will allow insurers to assume other related business areas that are deemed to be essential for operating new business, such as a platform-based health care-related service offering. Third, the government will support digital innovation of insurance business to
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Nov 01, 2021
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Oct 28, 2021
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Oct 26, 2021
- Government Unveils Additional Measures for Household Debt Management
- The government announced additional measures to strengthen household debt management at the 47th Meeting of Central Economic Response Headquarters held on October 26. The measures are aimed at preemptively managing household debt-related risks and resolving financial imbalances while ensuring the availability of loans to individuals in actual need. Some of the key measures include improving the effectiveness of DSR rules applied on individual borrowers, strengthening targeted management in the nonbank sector and promoting more installment payments on both housing and personal credit-based loans. These are supplementary measures to the initial household debt management plan announced on April 29, 2021. Background (Recent Trends) The household debt growth has shown a downward trend in recent years after reaching an 11.6 percent growth in 2016. However, it has spiked up again in 2020 due to the pandemic-related policies and rise in asset prices.For this year, the government had previously set the goal of containing the growth of household debt to five to six percent as it sought to control debt levels while continuing to make financing available for first time homebuyers, renters, etc. Along this line, the government introduced the measures to curb credit-based loansand expand the application of the debt service ratio (DSR) rules on individual borrowers in April this year. At the same time, the loan-to-value (LTV) ratio has been eased with the support for rent deposit (including jeonse) made available for young adults, newly married couples, etc. However, household debt levels spiked in the first half of this year due to instability in the housing market and resurgence in the coronavirus infection cases. The growth in credit loans and personal mortgages that led the surge in total debt levels at the end of 2020 stabilized. But loans for rent deposits, collective lending and government-backed housing mortgages all continued to rise with a spillover effect into the nonba
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Oct 19, 2021
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Oct 14, 2021
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Oct 12, 2021
