Financial Services Commission: "Market Stabilization Measures to Be Implemented if Volatility Increases Due to COVID-19"

On the 17th, citizens are watching the joint work report of four economic-related ministries?the Ministry of Economy and Finance, the Ministry of Trade, Industry and Energy, the Ministry of SMEs and Startups, and the Financial Services Commission?held at the Blue House in the Seoul Station waiting room. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jo Gang-wook] Financial authorities have decided to boldly implement timely market stabilization measures if market volatility expands due to the spread of the novel coronavirus infection (COVID-19).

On the 24th, the Financial Services Commission held a financial market inspection meeting chaired by Secretary-General Kim Tae-hyun and announced this plan.

On that day, the domestic financial market saw the KOSPI plunge 3.87% due to a sharp increase in confirmed cases and the escalation of the crisis level, while the won/dollar exchange rate surged by 11 won compared to the previous trading day.

The Financial Services Commission analyzed that the large drop was due to increased uncertainty caused by the rapid rise in confirmed cases and concerns about the real economy. In particular, it judged that downward pressure increased due to rapidly changing conditions over the weekend and heightened caution following the crisis level escalation.

Accordingly, the Financial Services Commission has established a policy to prepare for the possibility of increased financial market volatility depending on the future trend of COVID-19 confirmed cases.

First, through a 24-hour monitoring system operated jointly with related organizations such as the Financial Supervisory Service and the International Financial Center, market conditions will be closely examined, and information will be shared with relevant ministries through macroeconomic and financial meetings.

Also, depending on the situation, financial situation inspection meetings will be held with related organizations such as the Financial Supervisory Service to discuss trend monitoring and response measures.

Along with this, since an emergency plan (contingency plan) suitable for market conditions is already prepared, if market volatility expands, timely and appropriate market stabilization measures will be boldly implemented.