Schedule Canceled, Canceled Again... Financial Authorities and Industry Issue 'Non-Contact Orders' Amid COVID-19 (Comprehensive)

Financial Services Commission Cancels Scheduled Briefing to Minimize In-Person Contact
Yoon Seok-heon, Financial Supervisory Service Chief, Also Cancels Meeting with Heads of 5 Major Financial Holding Companies

On the morning of the 24th, medical staff at Daenam Hospital in Cheongdo, Gyeongbuk, are transferring a patient to another location. (Source = Yonhap News)

[Asia Economy Reporter Kim Hyo-jin] The spread of the novel coronavirus infection (COVID-19) has triggered an emergency alert across financial authorities and the financial sector. Scheduled policy-related events and major external schedules have been consecutively canceled to minimize contact among stakeholders, while emergency response systems have been activated to prepare for any unforeseen situations.

According to financial authorities and the financial sector on the 25th, the Financial Services Commission (FSC) canceled a media briefing by the head of the Financial Innovation Planning Group, which was scheduled for the morning regarding the promotion plan of fintech and digital finance innovation projects. Given that fintech and digital finance are core policies of the FSC's 'innovative finance' initiative, this highlights the seriousness of the situation.

A briefing by officials to the media involves close communication with reporters, implying the possibility of mutual contact. The FSC explained, "The briefing is canceled due to concerns raised about COVID-19." The FSC plans to maintain this stance for the time being.

In this context, Eun Sung-soo, chairman of the FSC, expressed concerns about the spread of COVID-19 during a meeting with financial group CEOs held the previous day. Before his opening remarks at the meeting, he said, "I have thought a lot about whether holding this meeting today is appropriate," adding, "Since the notice was already given, we will proceed, but we will minimize the number of participants and the duration as much as possible and only listen to opinions on-site."

Most of the attendees, including officials from the FSC, Financial Supervisory Service (FSS), and financial group CEOs, wore masks and refrained from handshakes or showed caution while greeting each other. The FSC provided masks in the large conference room on the 16th floor of the Government Seoul Office Building where the meeting was held, distributing them to attendees who had not brought masks.

On the same day, the FSC held a financial market monitoring meeting chaired by Secretary-General Kim Tae-hyun, deciding to take bold market stabilization measures if market volatility increases due to COVID-19. The FSC also plans to monitor market conditions through a 24-hour surveillance system jointly operated with related organizations such as the FSS and the International Financial Center, and share information with relevant ministries through macroeconomic and financial meetings.

Eun Sung-soo, Chairman of the Financial Services Commission

The first meeting of the year between Yoon Seok-heon, governor of the FSS, and the chairmen of the five major financial holding companies was also canceled. Governor Yoon was originally scheduled to have a breakfast meeting with the chairmen of Shinhan, KB, Hana, Woori, and NH Nonghyup financial groups at a location in Yeouido, Seoul.

This meeting had attracted attention as tensions between the FSS and the industry had risen due to large-scale losses in overseas interest rate-linked derivative-linked funds (DLF), Lime Asset Management's private equity fund losses, and subsequent sanctions and investigations by the FSS.

In particular, there was interest in the possibility that Governor Yoon and the financial holding chairmen could broaden mutual understanding and establish a foundation for cooperation through communication about recent situations, but this was postponed to a later opportunity due to the impact of COVID-19.

Meanwhile, the FSS decided the previous day to expand and establish an emergency response organization led by the senior deputy governor to minimize the impact of COVID-19 on the financial market. The FSS also decided to suspend on-site inspections in regions severely affected by COVID-19 and minimize inspections in other areas for the time being.

However, monitoring of voice phishing (telecommunication financial fraud), smishing (text message-based financial fraud), and unfair trading in the securities market, which may exploit the spread of COVID-19, will be strengthened, and strict measures will be taken if violations are detected.

The industry has also been put on red alert. Major financial holding companies are canceling or minimizing external schedules of executives, including their chairmen. Shinhan Financial Group canceled the welcoming event for the launch of the 6th batch of 'Shinhan Future's Lab,' a startup support and nurturing program. Chairman Cho Yong-byeong, who usually attends the event annually to give congratulatory remarks, will instead deliver a video message this year.

Woori Financial Group also canceled most of Chairman Sohn Tae-seung's scheduled events. NH Nonghyup Financial Group established internal guidelines to replace reporting procedures between Chairman Kim Kwang-soo and employees with written communication as much as possible and to refrain from offline meetings among employees for the time being. KB Financial Group and Hana Financial Group also issued orders to refrain from group activities such as internal meetings and training sessions.