Press Releases - Financial Services Commission

Press Releases

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Mar 08, 2021

KoFIU's Upgraded AML System Demonstrates Significant Improvements

The FSC announced that the Korea Financial Intelligence Unit (KoFIU)s upgraded anti-money laundering system in operation since December 17 of last year has shown significant improvements in terms of its suspicious transaction data processing, data screening and analysis and information security. The KoFIU began to operate an upgraded AML system from December 17, 2020to improve efficiency in data processing in response to the increasing volume of reports the system handles. In this regard, the past two months of operation has shown that significant improvements were made as intended. First, the suspicious transaction report filing system has become more efficient. The number of financial institutions filing STRs to KoFIU through an exclusive security network has been expanded to 3,664 from 611 previously. As such, the STR filing rate via exclusive security network has almost tripled from thirty percent to eighty-eight percent, with the processing time per STR reduced by more than ten seconds. Second, the screening and analysis process has been made more efficient with the increased use of digitalization and automation in the work process. The volume of preemptive screening and analysis of suspicious transactions has increased thirty-five percent on average compared to 2019. Third, the system hardware which is located at the National Information Resources Service guarantees much stronger levels of security and stability in management. The application of the standard framework on e-government has ensured an efficient integration of electronic resources and has improved the systems daily processing performance by more than nine times compared to the previous system. In order to more effectively respond to the increasingly diverse and complex types of money laundering schemes, the authorities will continue to work on improvements to the AML system. * Please refer to the attached PDF for details.
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Feb 10, 2021

Household Loans, January 2021

The outstanding balance of household loansin all financial sectors rose KRW10.1 trillion from the previous month at the end of January 2021 (up 8.5% y-o-y). The household loan balance increased KRW7.6 trillion in the banking sector and KRW2.5 trillion in the non-banking sector. By type, mortgage loans rose KRW5.8 trillion in January, declining KRW0.9 trillion from the previous month (up KRW6.7 trillion y-o-y). In the banking sector, mortgage loans grew KRW5.0 trillion while mortgage lending by non-banks increased KRW0.8 trillion from the previous month. Other types of loans rose KRW4.3 trillion as demand for credit loans remained high. The financial authorities will closely monitor trends in credit loans while ensuring a seamless provision of lending support to businesses hit by social distancing measures. In the first quarter, the authorities will come up with a more effective household debt management plan focusing on individual DSR. * Please refer to the attached PDF for details.
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Feb 05, 2021

Rules Change Announced for Insurance Businesses Specializing in Small-sum and Short-term Policies

The FSC announced the revisions to the Enforcement Decree of the Insurance Business Act on February 4, setting entry requirements for the establishment of insurance businesses specializing in small-sum, short-term policies and introducing measures to improve the soundness of the insurance industry. The revisions will be put up for public notice for forty days until March 17, 2021. Key Revisions (Small-sum Shor-term Insurance Policies) The minimum capital requirement for setting up an insurance business specializing in small-sum, short-term insurance policies will be set at KRW2 billion. Small-sum, short-term insurance coverages will be allowed in all insurance coverage areas where applicable with a coverage term of one year, premiums of up to KRW50 million and the insurers annual gross premium revenues up to KRW50 billion. (Requirement for External Evaluation on Policy Reserves) Insurance businesses with total assets of KRW1 trillion or more will be required to have external actuaries approve the appropriateness of their policy reserves. This requirement will also be applied to the insurers with less than KRW1 trillion in total assets but whose policy coverage types are considered as essential for them to ensure the payout capabilities. The external actuaries will be entitled to a right to request relevant information from insurance companies. To guarantee impartiality, external evaluations from the same institution will not be allowed for four consecutive years. (Rules on Subsidiaries) The revisions will clearly indicate that insurers will be permitted to own MyData and health care-related businesses as subsidiaries. Expectation The authorities expect that the revisions will help promote the development of diverse types of small-sum, short-term insurance products for consumers according to their individual lifestyle, improve the soundness and competitiveness of insurance businesses and encourage insurers to boost investment and cooperation in new business areas, su
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Jan 14, 2021

FSC Plans to Improve Corporate Disclosure Rules

Vice Chairman Doh Kyu-sang held a meeting with industry officials and experts via teleconference on January 14 and discussed the government’s plans to improve rules on corporate disclosure.The following is a summary of Vice Chairman Doh’s remarks.BACKGROUNDAs the pandemic situation continues, there are growing uncertainties throughout the economy and rapid changes are taking place in the business management environment. As such, the accuracy and promptness in corporate disclosure has become ever more important. Considering a surge in retail investors’ participation in stock markets last year, the disclosure rules need to be improved to allow retail investors to more easily understand disclosure information while reducing filing burdens for companies. In addition, with growing significance of environmental, social and governance (ESG) factors and responsible investing, it is necessary to set up an appropriate regulatory environment.PLANS FOR IMPROVEMENTI. IMPROVE INVESTOR CONVENIENCE IN USING DISCLOSURE INFORMATIONThe required criteria for company disclosure reports and the categorization system will be changed and redundancy will be removed to help improve retail investors’ understanding of disclosure information. An easy-to-understand information booklet will also be published for retail investors. In addition, the Data Analysis, Retrieval and Transfer (DART) System managed by the Financial Supervisory Service will be improved to make it more user-friendly with the introduction of more useful menu categories and enhanced search capabilities.II. REDUCE COMPLIANCE BURDENS FOR BUSINESSESQuarterly reports which have placed relatively heavy burdens on companies will be simplified to contain only key disclosure information, reducing the current requirement items by about forty percent. In addition, corporate filing burdens will be reduced for a greater number of smaller sized companies. III. PROMOTE ESG/RESPONSIBLE INVESTINGThe Korea Exchange will provide a guida
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Jan 14, 2021

Household Loans, December 2020

The outstanding balance of household loans in all financial sectors rose KRW8.5 trillion from the previous month at the end of December 2020 (up 8.0% y-o-y). The household loan balance increased KRW6.7 trillion in the banking sector and KRW1.8 trillion in the non-banking sector.By type, mortgage loans expanded KRW6.7 trillion in December, dropping KRW0.1 trillion from the previous month (up KRW2.1 trillion y-o-y). In the banking sector, mortgage loans grew KRW6.3 trillion while mortgage lending by non-banks increased KRW0.4 trillion from the previous month. Other types of loans rose KRW1.8 trillion, showing a significant decline (down KRW10.1 trillion m-o-m) from the previous month due to strict regulations on credit loans.In 2021, the financial authorities will continue to closely monitor trends in household loans and check the implementation of the household debt management plan. The authorities will draw up a plan in the first quarter that aims to make a gradual transition toward the the application of DSR rules centered on individual borrowers’ debt service capabilities.* Please refer to the attached PDF for details.
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Jan 13, 2021

FSC Grants Preliminary Financial Investment Business License to IMC Trading BV

The FSC decided to grant a preliminary financial investment business license to IMC Trading BV, a Netherlands-based trading firm on January 13. It marks the first approval of a foreign-based trading firm in three and a half years.Based on the application processing results by the Financial Supervisory Service, the FSC decided that IMC meets the requirements set forth by the Financial Investment Services and Capital Markets Act.The entry of a new foreign-based securities firm into domestic markets has favorable effects as its market making function can help propel transactions on low-liquidity stocks and help promote domestic markets as global financial hubs.As such, the authorities will continue to work on close supervision of market makers to ensure their proper function.IMC is required to apply for the final approval within six months.* Please refer to the attached PDF for details.
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Jan 07, 2021

Authorities Hold Meeting on Improving Financial Education Programs

The FSC and the FSS held a financial education council meeting via teleconference on January 7 to review the progress of the general plans to improve financial education programs announced on May 1, 2020 and to decide on a specific timeline for implementation. KEY DETAILS(CONTENTS) A guideline on the development of financial education contents and specific standards for the contents certification system are currently being developed. The authorities will finalize the guideline and the standards at the council meeting scheduled for April this year and begin the contents certification process.(CONTENTS DELIVERY CHANNELS) Due to the ongoing COVID-19 pandemic, a shift to more online contents delivery channels has taken place. In the second half of 2021, the one-stop online contents site will be set up to make certified educational contents available to the public at free of charge.(INSTRUCTORS) The authorities are currently working on developing certification standards for professional instructors. The instructor certification process will begin in the first half of 2021 and the one-stop online contents site will operate a professional instructor database in the second half of 2021.(EDUCATIONAL METHODS) Diverse educational and counseling programs are being developed for different groups of target audiences, which will be available for service in 2021.(SCHOOL PROGRAMS) Financial education programs suitable for middle school and high school students are being developed with a pilot program scheduled for March-April 2021.(IMPLEMENTATION FRAMEWORK) Specific details regarding the operation of the financial education council have been included in the enforcement decree of the new legislation on financial consumer protection, which will go into effect in March 2021. The FSS will assume the role of financial education center and coordinate functions of local financial education providers.* Please refer to the attached PDF for details.
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Jan 07, 2021

Amendments to Insurance Business Act to Set Up Joint Committee on Public-Private Health Insruance

The FSC announced amendments to the Insurance Business Act on January 7, which will lay legal foundations for an inter-ministerial cooperation between the FSC and the Ministry of Health and Welfare in the establishment and operation of a joint committee on public-private health insurance system.There have been growing needs for the development of a more closely linked health insurance system between the state-operated national health insurance (NHI) service and indemnity health insurance policies offered by private insurers. As such, the FSC and the MOHW have each drawn up amendments to the Insurance Business Act and the National Health Insurance Act, respectively, with an aim of guaranteeing the provision of a more systematic healthcare coverage and managing healthcare costs at a reasonable level.The amendments establish new provisions which (a) mandate policy cooperation between the FSC and the MOHW, (b) set up a joint committee on public-private health insurance system, (c) authorize the FSC and the MOHW to conduct joint surveys on the interplay between the NHI and private health insurance system and to disclose survey results to the public, etc.The revisions will be put up for public comments until February 16, 2021.* Please refer to the attached PDF for details.
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Jan 05, 2021

FSC Announces Availability of One-stop Credit Card Reward Points Redemption Service

The FSC announced the introduction of one-stop credit card reward points redemption service made available through the websites and mobile apps of the Credit Finance Association and the Korea Financial Telecommunications and Clearings Institute.Beginning on January 5, individuals can visit either www.cardpoint.or.kr or CFA’s mobile app or KFTC’s mobile app called AccountNFO to check reward points from all their credit cards and redeem in cash and transfer to the account of their choosing.In addition, from January 5, making changes to automatic scheduled payment from credit or debit cards has become easier through KFTC’s mobile app (AccountNFO) or www.payinfo.or.kr.The FSC will continue to work on improving convenience and user experience for financial consumers.* Please refer to the attached PDF for details.
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Dec 21, 2020

FSC Chairman Reviews Policy Response to COVID-19 & Discusses Next Year's Financial Policy

FSC Chairman Eun Sung-soo held a meeting via teleconference on December 21 to assess the implementation of the COVID-19 financial support programs and discuss the 2021 financial policy direction.At the meeting, Chairman Eun stated that the effective provision of the COVID-19 financial support packages was made possible due to close cooperation from all financial sectors, which also helped to create the right conditions for an economic rebound. As a result, out of the KRW175 trillion-plus stimulus programs, about 76 percent of the first phase emergency loan program for small merchants was provided within the first two months and some KRW32.5 trillion in special lending support for SMEs and middle market enterprises was provided in excess of the original target amount of KRW29.1 trillion. Since April, the financial authorities, local lenders and other relevant institutions were able to systematically respond to the crisis by holding financial risk assessment meetings thirty-one times.With regard to the protracted pandemic situation and the next year’s financial policy direction, Chairman Eun stressed the importance of strict compliance with virus prevention measures and urged cooperation from all financial sectors. As the COVID-19 pandemic continues to place burdens on small merchants and SMEs, Chairman Eun indicated his intention to focus on the vulnerable sectors.Chairman Eun also pledged to preemptively manage risks emanating from abundant market liquidities by preventing concentration of liquidities in high risk assets and promoting an orderly deleveraging.Finally, Chairman Eun called for financial institutions to take a leading role in the country’s transition toward a “first mover” economy in the post-pandemic era, highlighting the importance of their active participation in the government’s New Deal initiative and carbon neutral goal for 2050.* Please refer to the attached PDF for details.
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Dec 09, 2020

FSC Will Continue to Ensure Convenient & Safe Certification Mechanisms in Financial Services

As the government announced the discontinuation of the public key certification system beginning on December 10, the FSC has prepared the following frequently asked questions to help financial consumers better understand the changes in their use of financial services.FREQUENTLY ASKED QUESTIONSQ) The public key certification system will be discontinued from December 10. Does that mean that financial transactions can be carried out without a certification?A) In principle, you still need a certification when required by a financial transaction. However, any type of certifications provided by private sector entities can be used in place of the current public key certification.Q) What happens to the existing public key certification when the discontinuation starts on December 10? Can I no longer use my public key certification to conduct financial transactions?A) Even after the discontinuation begins, you may still use your current public key certification to carry out various financial transactions.Q) Can I apply for the issuance of a new public key certification after December 10?A) Yes, you can still apply for the issuance of what will be newly termed the ‘common key certification.’Q) What types of certifications are available for the use in contactless financial transactions?A) There is the ‘common key certification’ issued by the Korea Financial Telecommunications Clearings Institute and KOSCOM, individual bank-issued certifications and certifications issued by telecom companies and platform businesses.Q) As of now, where and how can I get a private sector-issued certification?A) You can easily get it online by visiting websites of a commercial bank or a securities firm or on their mobile apps.Q) What are some of the upsides of the private sector-issued certification system?A) There is no need to download and install special software. You can use online cloud services to store your certification. Plus, biometric authentication and passcode identification off
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Dec 09, 2020

Household Loans, November 2020

The outstanding balance of household loans in all financial sectors rose KRW18.3 trillion from the previous month at the end of November 2020 (up 7.9% year-on-year). The household loan balance increased KRW13.6 trillion in the banking sector and KRW4.7 trillion in the non-banking sector.By type, mortgage loans increased KRW6.8 trillion in November, dropping KRW0.5 trillion from the previous month (up KRW7.3 trillion y-o-y). In the banking sector, mortgage loans expanded KRW6.2 trillion, down KRW0.6 trillion from the previous month, as jeonse loans grew at a slower rate. Mortgage lending by non-banks saw an increase of KRW0.6 trillion from the previous month. Other types of loans grew KRW11.5 trillion as credit-based lending by both banks and non-banks rose KRW7.4 trillion and KRW4.1 trillion, respectively, due to high demand for IPO deposits and front-loaded demand ahead of tougher regulations on credit lending.The government will continue to closely monitor trends in household loans and check the implementation of household debt management plan.* Please refer to the attached PDF for details.
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Dec 09, 2020

Improvements to Indemnity Health Insurance to be Introduced in July Next Year

The FSC announced the introduction of improvements to the current indemnity health insurance system beginning in July next year, which will help prevent moral hazard and lower premiums for the insured. The FSC expects that the improved structures will help ensure that indemnity health insurance plans can continue to provide important social safety nets alongside the state-operated national health insurance (NHI) service.BACKGROUNDIndemnity health insurance policies provide important social safety nets as they offer coverages to health care costs that are not covered by the NHI. As of the end of 2019, some 38 million individuals were covered by indemnity health insurance plans. When it was first introduced in 1999, the availability of fully covered plans guaranteeing no out-of-pocket expenses created moral hazard of excessive hospital visits and medical testing. Excessive use of health care services by a few has been pushing up premiums for others while insurers have seen a spike in loss ratios. A continuation of this trend in indemnity health insurance raises concerns about rising premiums and the sustainability of indemnity health insurance services. As such, the FSC has prepared the following measures to address these issues.KEY MEASURESI. LOWER PREMIUMS WHILE GUARANTEEING THE SAME LEVEL OF COVERAGE(COVERAGE) New indemnity health insurance policies will provide the same level of coverage as previously available on most types of illnesses and injuries with the maximum coverage of about KRW100 million for both in- and outpatient services. However, in order to prevent moral hazard of excessive and unnecessary use and provision of medical services, out-of-pocket expenses and deductions for outpatient services will be increased.(PREMIUM) Due to the increase in out-of-pocket expenses and outpatient deductions, insurance premiums will be significantly lower compared to the previous levels. Considering high levels of loss ratios, it is expected that premiums of newly avai
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Dec 09, 2020

Legal Grounds Established for Supervision of Non-holding Financial Groups

The FSC announced the establishment of new legal grounds for the supervision of non-holding financial groups as the new legislation was passed at a plenary session of the National Assembly on December 9.KEY PROVISIONS- NON-HOLDING FINANCIAL GROUPS: Have two or more subsidiaries operating financial businesses with total financial assets of KRW5 trillion or more.- INTERNAL RISK MANAGEMENT: An internal group-wide risk management body should be established led by the group’s top representative company to oversee the group-wide risk management policy, handle regulatory compliance, pursue prudential management, etc.- INTERNAL ASSESSMENT: Non-holding financial groups should conduct self-assessment on their capital adequacy requirements to maintain financial soundness while taking into account intra-group transactions and risk concentrations.- REPORTING DISCLOSURE REQUIREMENTS: Non-holding financial group’s top representative company is required to report and disclose the group-wide capital adequacy status and risk factors to the FSC, which in turn may request a submission of a management improvement plan if deemed necessary to prop up capital or reduce risky assets.The authorities expect that the new legislation on the supervision of non-holding financial groups will help foster a self-regulating risk management system for the regulated entities. The authorities will be able to more preemptively manage systemic risks in financial markets while minimizing the possibility of risk transfers and preventing damages to consumers and investors. In this regard, the government will continue to work for the advancement of both group-wide and systemic risk management schemes. * Please refer to the attached PDF for details.
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Dec 07, 2020

FSC to Introduce Routine Inspection of Personal Data Protection at Financial Institutions

The FSC unveiled its plans to introduce a routine inspection of personal data protection at financial institutions on December 4 to ensure consistency in data protection and improve accountability. The plans include establishing specific inspection standards according to the data lifecycle, providing feedbacks on a regular basis through Financial Security Institute and setting up self-inspection guidelines for financial institutions. The routine inspection on the performance of data protection is scheduled to go into effect on February 4, 2021.BACKGROUNDWith the availability of new technologies, data pseudonymization/anonymization, data convergence and so on, the process of monitoring and inspecting how financial institutions handle data protection needs improvements. In this regard, the following issues have been identified as problematic—(a) lack of specific inspection standards, (b) difficulty in carrying out a comprehensive and systematic inspection on more than 3,000 financial institutions and (c) lack of self-inspection guidelines for financial institutions. To address these issues, the FSC has drawn up the following measures.KEY MEASURESI. IMPROVE INSPECTION CRITERIA STANDARDSIn order to ensure a close inspection of the performance of data protection, specific inspection criteria will be established with 9 overall categories and 143 subcategories. The detailed inspection criteria will reflect the different stages of data lifecycle and will be measured in four levels—(a) compliant, (b) partially compliant, (c) not compliant and (d) not applicable.To guarantee a systematic management and monitoring of the newly available technologies, such as data pseudonymization/anonymization, data convergence and so on, a close inspection on the compliance status of technical and managerial data protection measures will be carried out. Financial institutions with outstanding performance and an accident-free status for a certain period will be awarded safety certification
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Dec 03, 2020

FSC to Introduce Improvements to Subscription Economy's Payment and Refund System

The FSC announced its plan to improve rules on subscription businesses’ payment system to enhance consumer protection and user experience on December 3.Subscription businesses generally attract customers by offering free subscription to their services first. However, once the free subscription period expires, the procedure of informing customers about the details of recurring payments and their cancellation and refund policy has remained inadequate. As such, the FSC plans to work on the following measures to strengthen consumers’ right to information, simplify the cancellation process and make more refund options available in subscription businesses.KEY MEASURESI. ESTABLISH STANDARDIZED TERMS AND CONDITIONS(DEFINITION OF RECURRING PAYMENTS) A clearly defined scope of recurring payments will be introduced on the standardized terms and conditions.(NOTIFICATION REQUIREMENT) Subscription businesses will be required to notify their customers at least seven days prior to switching their services from free offering to recurring payment-based services.(CANCELLATION) The process of cancelling a subscription service will be made easier through mobile applications and online platforms and the cancellation of services will be made available even after the regular customer service hours.(REFUND POLICY) When a cancellation of recurring payments occurs, only the amount of fee commensurate with the used monthly service may be charged, while more refund options will be made available through credit cards and account transfers.II. STRENGTHEN PAYMENT GATEWAYS’ SUPERVISION OVER THEIR AFFILIATESBy introducing revisions to the Enforcement Decree of the Specialized Credit Finance Business Act, legal grounds will be established that will allow payment gateways to strengthen supervision over their affiliates and ensure that their affiliates provide appropriate transaction information to customers.* Please refer to the attached PDF for details.
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Dec 02, 2020

FSC Revokes Business Registration of Lime Asset Management

The FSC announced its decision to revoke the business registration of Lime Asset Management on December 2 and to impose a fine of KRW950 million and issue suspension of duties on its staff and executive personnel. According to inspections carried out by the Financial Supervisory Service, Lime Asset Management was found to have engaged in illegal and inappropriate fund management activities, which caused a large scale suspension of redemptions for investors in the amount of about KRW1.7 trillion. To help minimize losses for investors, between November 2019 and September 2020, the financial authorities focused on closely examining fund assets managed by Lime Asset Management, drawing up a redemption plan for investors and setting up a new fund manager (Well Bridge Asset Management) to take over funds from Lime Asset Management. As such, the FSC also ordered a transfer of some 215 funds currently managed by Lime Asset Management to Well Bridge Asset Management effective from December 3, 2020. * Please refer to the attached PDF for details.
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Nov 11, 2020

Household Loans, October 2020

The outstanding balance of household loans in all financial sectors rose KRW13.2 trillion from the previous month in October 2020 (up 7.1% year-on-year). The household loan balance increased KRW10.6 trillion in the banking sector and KRW2.5 trillion in the non-banking sector.By type, mortgage loans increased KRW7.2 trillion in October, rising KRW0.1 trillion from the previous month (up KRW3.2 trillion y-o-y). In the banking sector, mortgage loans expanded KRW6.8 trillion while jeonse loans grew at a slower rate (up KRW3.0 trillion m-o-m). Mortgage lending by non-banks saw an increase of KRW0.4 trillion from the previous month. Other types of loans went up KRW6.0 trillion as credit-based lending by both banks and non-banks rose KRW3.8 trillion and KRW2.1 trillion, respectively, due to seasonal factors.The financial authorities will closely monitor trends as the volume of household loans generally tends to expand in the fourth quarter. While considering the need to minimize downside effects to lower income households and small-scale businesses, the government will prepare plans to more effectively manage household debt.* Please refer to the attached PDF for details.
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Nov 06, 2020

FSC Holds Meeting on Financial Market Conditions

FSC Chairman Eun Sung-soo held a meeting to review the effects of the US presidential election on financial markets at home and abroad on November 6. As there are possibilities of growing market volatilities in the financial markets in the wake of the US presidential election, the FSC will continue to stay alert and closely monitor market conditions.At the meeting, Chairman Eun stressed the importance of maintaining market stabilization efforts as well as legislative efforts to improve rules and regulations, such as strengthening sanctions on illegal stock short selling activities, allowing more short sale opportunities for retail investors and improving the current IPO system.Chairman Eun also discussed the importance of maintaining strict public health safety and preventive measures at individual financial institutions in order to ensure that the spread of COVID-19 does not pose risks to financial markets. To this end, Chairman Eun called for strong cooperation from the authorities in preventing the spread of the virus.* Please refer to the attached PDF for details.
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Oct 13, 2020

Household Loans, September 2020

The outstanding balance of household loans in all financial sectors rose KRW10.9 trillion from the previous month in September 2020 (up 6.8% year-on-year). The household loan balance increased KRW9.7 trillion in the banking sector and KRW1.1 trillion in the non-banking sector.By type, mortgage loans increased KRW7.1 trillion in September, growing KRW0.8 trillion from the previous month (up KRW4.4 trillion y-o-y). In the banking sector, jeonse loans rose KRW3.5 trillion while mortgage loans expanded KRW2.0 trillion. Mortgage lending by non-banks saw an increase of KRW0.4 trillion from the previous month. Other types of loans went up KRW3.8 trillion as credit-based lending by both banks and non-banks rose KRW3.0 trillion and KRW0.7 trillion, respectively.The financial authorities will closely monitor trends in household loans to prevent risks to the economy and draw up measures when necessary in close coordination with the relevant ministries.* Please refer to the attached PDF for details.
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