[Asia Economy Reporter Hyunwoo Lee] Kim Joo-hyun, Chairman of the Financial Services Commission, recently stated that regarding the tightening of the funding market, they will do everything possible without being bound by existing principles.
After attending an emergency macroeconomic and financial meeting held at the Bankers' Hall, Chairman Kim said at a press conference, "There are various factors in the bond market, but I understand that the main reason is the sudden rise in interest rates," adding, "We will communicate more closely with the market and actively respond to the difficulties faced by the private sector."
He continued, "In the case of bonds, we have deferred the normalization of the Liquidity Coverage Ratio (LCR) regulatory ratio related to bank bonds and Korea Electric Power Corporation (KEPCO) bonds." The LCR is the ratio of high-quality liquid assets to the expected net cash outflows over the next 30 days. It is a regulation designed to prepare for situations where large sums of money temporarily flow out during financial crises. The Financial Services Commission announced on the 20th that it would defer the normalization of the LCR regulatory ratio for six months.
Chairman Kim said, "Since we do not know how market conditions will change, we are in a position to communicate with the market about all possible changes and take all necessary measures," adding, "Although we have been conducting our own monitoring, we will respond promptly to unexpected variables such as the recent Gangwon-do incident, which we had not anticipated."
He also stated, "We will do everything possible without being bound by existing principles or methods," adding, "If necessary, we will extend the LCR deferral further, and we will engage in dialogue with the market regarding loan-to-deposit ratio regulations and take necessary actions."
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