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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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
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Oct 07, 2021
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Sep 30, 2021
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Sep 29, 2021
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Sep 28, 2021
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Sep 28, 2021
- FSC Chairman Discusses Key Policy Issues with Heads of State-backed Financial Institutions
- FSC Chairman Koh Seungbeom met with the heads of eight state-backed financial institutions on September 28 and held talks on key policy issues and the role of state-backed financial institutions. The following is a summary of Chairman Kohs remarks. (COVID-19 Crisis Management, Orderly Exit Future Preparation) Chairman Koh first talked about the need to consider an orderly normalization process and preparation for the future along with the COVID-19 crisis management measures. In this regard, Chairman Koh put forward four key policy tasks(a) provision of adequate support for vulnerable sectors, (b) management of financial imbalances aimed at maintaining stability, (c) restoration of market functions in a gradual manner and (d) enhancing the role of finance to support new growth industries. With regard to the role of state-backed financial institutions, Chairman Koh urged them to provide sufficient buffer to vulnerable sectors and work to make a transition from the current paradigm of emergency support to recovery support in the area of industrial financing. As these tasks require an accurate understanding about the situation, clear analysis about policy effects as well as future forecasts, Chairman Koh pledged to closely communicate with experts from diverse areas. (Loan Support Extension) As a first step toward an orderly exit, Chairman Koh discussed the provision of loan maturity extensions and principal and interest payment deferments, which was recently made available for six more months until March next year.In this regard, participants agreed to work on a speedy provision of support through acquisition of nonperforming loans, debt adjustment programs, as well as through liquidity provision worth KRW4 trillion. To provide a strong backstop to lower income groups, Chairman Koh urged them to continue to expand the availability of microfinance support. (Strengthening Household Debt Management Measures) In order to maintain stability in the financial system, Chairman
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Sep 27, 2021
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Sep 26, 2021
- 42 VASPs File Registration Reports with KoFIU
- FSC Chairman Koh Seungbeom held a meeting with relevant officials on September 26 to go over the registration status of virtual asset service providers (VASPs) and discuss measures to prevent damages to consumers. As the September 24 deadline has ended, 42 VASPs have filed registration reports with the Korea Financial Intelligence Unit (KoFIU). Key Details (Registration Status of VASPs) As of September 24, 42 VASPs have completed filing their registration reports, which include 29 virtual asset trading platforms (or crypto exchanges) and 13 other virtual asset-related services (e.g. virtual asset wallet or depository service providers). The KoFIU and the Financial Supervisory Service (FSS) will evaluate registration reports and decide whether to accept their registrations within three months. (Termination of Business Operation) Among 66 virtual asset trading platforms which have been in business operations, 29 entities with Information Security Management System (ISMS) certifications, which account for about 99.9 percent of the market (as of September 21, 2021), have completed submitting their registration reports. Out of the 29 trading platforms, 25 entities that have not secured partnership with banks for real-name verified accounts were found to have terminated the KRW-based trading services as they filed for registration to provide trading services in virtual assets only. Considering that those that have failed to submit their registration reports by the deadline represent less than 0.1 percent of the market, the possibility of user damages has been significantly reduced. For the remaining 37 entities (in group C and D) that have not been able to obtain ISMS certifications and thus are subject to business closure, 36 of them except for one new entrant that has yet to start operatinghave terminated their business operations. As of September 21, the total amount of deposits (in KRW) held by these unqualified entities (in group C) stood at about KRW4.18 billion, do
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Sep 23, 2021
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Sep 22, 2021
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Sep 16, 2021
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Sep 09, 2021
- FSC Chairman Holds Talks with SME and Small Merchant Groups
- FSC Chairman Koh Seungbeom met with the heads of the Korea Federation of SMEs and other relevant industry groups representing small merchants on September 9 and held talks on the coronavirus support measures. The following is a summary of Chairman Kohs remarks. The Korean economy has undergone major changes since the coronavirus outbreak began in February last year. In response to COVID-19, the government rolled out KRW175 trillion-plus stimulus programs to overcome the crisis. To support SMEs and small merchants, ultra-low rate loans and special guarantees were provided. Along this line, maturity extensions on existing loans and deferments on interest and principal payments became available through all financial sectors. Following concerns over possible credit rating downgrades and deteriorating lending conditions, the authorities urged all financial sectors to take into account individual businesses recovery prospects when assessing their credit standing for loans. Due to these measures, the liquidity risks of SMEs and small merchants have come down in large parts with improvements also shown in terms of their credit standings. The economy and financial markets now show signs of stability backed by active response from the government and efforts by businesses. However, SMEs and small merchants in contact-intensive sectors, such as restaurants, hospitality, tourism and wholesale and retail, continue to face difficult situations, especially with growing numbers of newly infected cases from July. With regard to the possibility of providing another extension on loan maturity extensions and payment deferrals, which have been extended twice for a six-month period each, the authorities will work to come up with optimal measures as soon as possible while considering the coronavirus situation, conditions of the real economy and comments from the financial sectors. * Please refer to the attached PDF for details.
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Sep 06, 2021
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Sep 03, 2021
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Aug 26, 2021
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Aug 16, 2021
- Authorities Provide Consulting to VASPs and Advise Supplementary Actions Prior to Registration
- As a follow-up to the governments plan to enhance supervision on virtual asset service providers (VASPs) and their transaction activities,the FSC and relevant institutions provided on-site consulting to the 25 VASPs between June 15 and July 16 and advised them to take supplementary measures prior to their business registration. Out of the 33 VASPs that have already obtained the ISMS certification or are in the pending status, a total of 25 entities showed interest in receiving consulting from the authorities.As such, the FSC along with other relevant institutions provided on-site consulting to the 25 VASPs to review their preparation for business registration and check the level of stability in their transactions system. Key Details (Preparation for Registration) Pursuant to the Act on Reporting and Using Specified Financial Transaction Information (the Act hereinafter), VASPs should file necessary documents for registration until September 24 and adhere to AML duties from the time of their registration. As such, VASPs should have their own internal procedures, human resources and facilities ready to implement the AML requirements at the time of registration. When consulting was provided, no VASPs were found to have met all the registration requirements, and they have shown inadequate levels of preparedness for the implementation of the AML duties and other requirements set forth by the Act. Out of the 25 VASPs, 19 entities have obtained ISMS certification, but only four VASPs were found to have their business operation with real-name verified accounts. The VASPs that have obtained ISMS certification but have no real-name accounts may still apply for business registration but for the category that is barred from offering exchange services between virtual assets and a fiat currency. With regard to the level of preparedness in adhering to the AML requirements, the lack of employees overseeing this matter and insufficient system preparation for suspicious transactions
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Aug 11, 2021
