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Sep 18, 2011
- FSC Suspended Seven Mutual Savings Banks
- The Financial Services Commission (FSC) held a provisional meeting today and decided to suspend business operations of seven mutual savings banks – Jeil, Jeil II, Prime, Daeyeong, Ace, Parangsae, and Tomato – for six months.According to the result of the inspection by the FSS, six of the suspended savings banks – Jeil, Prime, Dae Young, Ace, Parangsae, and Tomato – were found to have their BIS capital adequacy ratio below 1%, and their debts exceed assets.As the plans for normalization submitted by the six savings banks were disapproved by the review committee, they were determined as insolvent and ordered to raise their capital adequacy ratios and normalize their businesses within 45 days in order to resume their operations.Jeil II was suspended because ①its BIS capital adequacy ratio is below 1%; ②there is a strong likelihood that the suspension of its parent company, Jeil, will lead to depositors’ bank runs, causing liquidity crunch; and ③it requested suspension.*Please read the attached file for details.
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Sep 15, 2011
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Sep 09, 2011
- FSC/FSS to Host 18th Annual Conference of the IAIS
- The Financial Services Commission and the Financial Supervisory Service of Korea (FSC/FSS) will host the 18th Annual Conference of the International Association of Insurance Supervisors (IAIS) from September 29 to October 1, 2011, at the COEX Convention Center in Seoul. Approximately 500 insurance supervisors and industry representatives as well as senior officials from international organizations including the IMF and World Bank are expected to attend this year's conference. The theme for this year's meeting is "Toward a New Horizon for Insurance Supervision: Cross-Sector Cross-Border Harmonization and Cooperation," and discussions on wide-ranging supervision and industry issues and topics including insurance standards, risk management, and consumer protection are scheduled.The 2011 Annual Conference will be the third international conference on insurance supervision that the FSC/FSS hosts after the Asian Forum of Insurance Regulators in June 2007 and the IAIS Triannual Meetings in June 2008. The FSC/FSS is pleased to host this year's meetings and welcomes all IAIS members, observers, and guests to Seoul for the important gathering. As this year's Annual Conference demonstrates, the FSC/FSS will continue to support and contribute to the mission of the IAIS to set effective global insurance standards and facilitate supervisory cooperation across countries.Established in 1994, the IAIS is the international insurance standard-setting body representing insurance regulators and supervisors from 190 jurisdictions in some 140 countries and works closely with other financial sector standard-setting bodies and international organizations such as the Basel Committee on Banking Supervision and the International Association of Securities Commissions to contribute to global financial stability. It is headed by Executive Committee with members representing various geographical regions and supported by three key committees in its work of issuing global insurance principles, stand
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Sep 05, 2011
- Hotline Established among Financial Authorities in Korea, China and Japan
- FSC Vice Chairman Shin Je-Yoon will be hosting a vice-minister-level conference call on September 6 at 10am with China Banking Regulatory Commission (CBRC) and the Financial Services Agency (FSA) of Japan.*Attendees: Shin Je-Yoon, Vice Chairman, Financial Services Commission, KoreaWang Zhaoxing, Vice Chairman, China Banking Regulatory Commission, China Masamichi Kono, Vice Commissioner, Financial Services Agency, JapanThe conference call was arranged out of shared recognition that close cooperation among the financial authorities in Korea, China and Japan has become all the more important in order to effectively respond to financial crises as anxiety heightens in global financial markets due to concerns about fiscal soundness of the US and Europe.*Korea first proposed to establish Korea-China-Japan hotline among the financial authorities, which was welcomed by China and Japan.Discussions will be made on the current conditions of the global economy and financial markets; and future outlook of the global economy. We will also exchange our opinions about each country’s current domestic financial market issues; and discuss details about how to operate the hotline such as whether to hold conference calls on a regular basis.*Please read the attached file for details.
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Jul 20, 2011
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Jun 30, 2011
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May 19, 2011
- Korea to Chair FSB T/F on EMDE Issues
- BACKGROUNDThe G20 leaders at the Seoul Summit held in November 2010 agreed to put financial regulatory reform issues viewed from the perspectives of emerging countries on G20 agenda ,and asked the FSB, IMF and World Bank to submit a progress report prior to G20 Cannes Summit in November 2011.Recognizing that G20 discussions had been mainly focused on how to overcome financial crises in advanced countries, Korea proposed that financial issues relevant to emerging countries need to be more actively discussed at the G20 meetings.TASK FORCE FOR EMERGING MARKET AND DEVELOPING ECONOMIES (EMDES)Against this backdrop, the FSB created a task force to deal with EMDE-specific issues in March 2011. The T/F is to select financial regulatory issues from the perspectives of EMDEs and make relevant policy recommendations.Groups of technical experts will be created within the T/F to conduct in-depth reviews on specific issues.** management of capital flows and foreign exchange risks, prudential oversight on global financial institutions, supervisory cooperation between home and host countries, implementation of international standards, development of capital markets, etc.The T/F is composed of international organizations (IMF, World Bank, BCBS, IAIS, IOSCO, BIS, ECB); and FSB members (Korea, the U.S., Canada, Japan, China, India, Brazil, Indonesia, Mexico, Russia, Saudi Arabia, Spain, North Africa, Argentina, etc)Korea’s FSC was appointed as chair of the T/F in May 2011, and FSC Standing Commissioner Sangche Lee will be representing Korea and preside over discussions in the T/F.The T/F is scheduled to submit an interim report to FSB Plenary Meeting on July 19, 2011. The report will be circulated to FSB regional consultative groups for review by September, and the final report will be completed prior to G20 finance ministers’ meeting in October and G20 Summit in November.*Please read the attached file for details.
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May 17, 2011
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Apr 06, 2011
- Korean Financial Market Update
- 1. Recent trends in the stock marketThe KOSPI index, which once fell to a low point of 1,923.30 on March 15 after the Japanese earthquake, has rebounded to a record-high of 2130.43 on April 5, renewing the highest point of 2,115.69 prior to the earthquake.The recent recovery in stock prices is mainly attributed to foreigners’ net buying based on their optimism that the Korean economy is relatively stable amid ongoing external uncertainties such as Japan’s earthquake and political turmoil in the Middle East.2. Foreign investors’ movement in Korean stock exchangeForeigners sold KRW 3.5 trillion in February, the biggest net sale by monthly basis since May 2010, but made net buying of KRW 1.2 trillion in March: notably, net buying of KRW 2.8 trillion after the Japanese earthquake.(By country)Starting this year, there has been a continued outflow of European funds (including the U.K), reflecting ongoing uncertainties in the European region. By contrasts inflows of funds from the U.S. and Asian region have been increasing since March.*As of March, the U.S made a net purchase of KRW 1.3 trillion, Singapore of KRW 0.7 trillion, China of KRW 0.2 trillion*Despite our concern of Japanese capital being pulled back, Japanese made a net purchase of KRW 155 billion instead(By fund-type)In February, all foreign investors except for Asian sovereign funds were net sellers. Starting March, however, the U.S. funds began to make net buying in large volume. Net buying by foreign investors was mostly made after Japan’s earthquake, and European investors (excluding European funds) also turned net buyers of Korean stocks.(By investment period)It has turned out more than half of foreign net buying made after the Japanese earthquake was made by short-term investors. (i.e. investment banks)*Short-term: IB with investment turnover ratio over 500%3. Grounds for foreign investors’ net buyingWithout wider spread of risk from the recent Japanese earthquake and the regional conflict in the
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Dec 02, 2010
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Nov 24, 2010
- Results of Emergency Economic Meeting after North Korea's Artillery Firing
- Vice Minister of Strategy and Finance Yim Jong-yong called for an emergency economic meeting* on Wednesday, November 24, a day after North Korea’s attack on Yeonpyeong Island to discuss the attack s impact on domestic and overseas financial markets and policy responses to future developments.*attendees: Vice Minister of Strategy and Finance (chair), Vice Minister of Knowledge Economy, Vice Chairman of Fair Trade Commission, Vice Chairman of Financial Services Commission, Senior Deputy Governor of BOK, Senior Deputy Governor of Financial Supervisory ServiceMarket reactionsAs the news of North Korea’s artillery firing was first reported at around 2:58 pm, right before the market close at 3:00 pm, it did not have a substantial and immediate impact on the stock market. However, after-hour markets including the futures market rattled, showing growing volatility.Right after the outbreak of the incident, Korea’s CDS spreads and Non-Deliverable Forward (NDF) rates sharply soared, but over time there has been no further rise.Potential impactThe attack’s impact on financial markets and the real economy may vary with future developments of the incident; however, as long as the situation does not escalate further, the impact is expected to remain temporary as it did when faced with similar geopolitical risks.Considering Korea’s solid economic recovery, fiscal soundness, current account surplus, and large foreign exchange reserves, to which foreign investors give high credibility, the Korean economy has sufficient capacity to absorb external shocks.Market observers and credit rating agencies assess that the incident would not significantly affect Korea’s sovereign credit ratings. *Moody’s said that North Korea’s attack would not negatively affect Korea’s sovereign credit rating.*Fitch maintained Korea’s sovereign rating at A + with the “stable” outlook.*SP said that the incident would not undermine foreign investment in Korea and other indices affecting K
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Nov 01, 2010
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Oct 27, 2010
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Oct 18, 2010
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Oct 15, 2010
- FSB Plenary Meeting and BCBS Meeting held in Seoul
- The 6th Plenary Meeting of Financial Stability Board and the 137th Basel Committee on Banking Supervision Meeting will be held at COEX Convention Center in Seoul on October 20 and 19, respectively.The Financial Stability Board (FSB) was created in April 2009 as the successor to the Financial Stability Forum (FSF) by the Group of 20 in its London summit, which includes FSF members and 12 more countries such as Korea and BRICs. It coordinates financial regulatory and supervisory standards at the international level and Korea has participated since its inaugural meeting in June 2009.The Basel Committee on Banking Supervision (BCBS), established by the central bank Governors of the Group of Ten countries in December 1974, was broadened to include more members in 2009. It formulates broad supervisory standards and guidelines in banking supervision. Korea became a member in March 2009.FSB Plenary MeetingThe Plenary Meeting is aimed at discussing and coordinating opinions among member countries so that the task of financial reform assigned by heads of G20 could be completed in the summit held in Seoul.This meeting will bring together about 70 heads of national authorities responsible for financial policy and supervision and central banks from 24 countries and 12 international financial institutions including IMF, WB, OECD, BCBS, IOSCO, and IAIS.They will discuss reducing moral hazard of systematically importance financial institutions (SIFI), strengthening bank capital and liquidity regulation, reforming OTC derivatives market infrastructure, FSB Outreach program and reducing dependence on external credit ratings and other major financial reform agenda.FSB Outreach program is held with non-member financial authorities to provide information on FSB’s major financial reform agenda and encourage the implementation of the agenda as agreed in G20 Toronto summit.BCBS MeetingThe Basel Committee on Banking Supervision will meet to finalize issues related to its regulatory reform
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Oct 05, 2010
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Sep 29, 2010
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Sep 15, 2010
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Sep 02, 2010
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Aug 26, 2010
- Measures to Support SMEs Hit by International Sanctions against Iran
- In order to support local small-and medium-sized enterprises (SMEs) that suffered losses fromtheir business with Iran due to reinforced international sanctions against Iran, the Korean government has planned measures to support them.1. Providing policy funds for SMEsGovernment funds such as the SME Business Promotion Fund (SBP Fund) and a fast-track lending program will be utilized to support local SMEs trading with Iran.(1) For SMEs with large exposure to Iran, the government will provide emergency loans and defer repayment of principal for outstanding loans.In particular, for those who have a greater chance of recovery from the loss incurred by international sanctions against Iran, the government will offer emergency loans at a 3.7~5.4% interest rate for three years, up to KRW 500 million for one company. Companies who are undergoing corporate restructuring conducted by financial institutions or whose incurred loss exceeds KRW 100 million are qualified for emergency loans.For companies who experienced losses from their trade with Iran, the government will grant a one-and-half-year grace period for their existing debts while leaving their maturity period (5~8 years) unchanged.(2) For SMEs temporarily under liquidity crunch, the government will provide liquidity through a fast-track lending program. If companies trading with Iran apply for the fast-track lending, they will be granted special guarantees by the Korea Credit Guarantee Fund (KODIT) and the Korea Technology Finance Corporation (KTFC) on a preferential basis.**The KODIT and the KTFC will provide 65%~75% guarantees for newly extended loans, up to KRW one billion.The banking sector will also provide liquidity for SMEs by extending new loans or rolling over existing debts. The Korea Trade Insurance Corporation (KTIC) will also launch a liquidity support program for SMEs.(1) To ease liquidity constraints for SMEs, the KTIC is to speed up its review process to provide compensation as soon as possible when expo
