Lee Bok-hyun "SVB Incident, Limited Possibility of Risk Expansion... Closely Monitoring"

The Financial Supervisory Service (FSS) announced on the 13th that it held a 'Financial Situation Review Meeting' to assess the impact of the recent Silicon Valley Bank (SVB) incident on financial companies.

On the morning of the same day, the FSS held a joint meeting led by FSS Governor Lee Bok-hyun, involving supervisory departments by sector and the New York office.

Governor Lee stated, "This incident occurred due to SVB's unique business structure coinciding with the recent financial tightening process. The U.S. government and supervisory authorities have taken measures to protect all depositors, limiting the possibility of systemic risk expansion." However, he added, "It is necessary to remain vigilant and closely monitor domestic and international financial market trends for the time being."

The FSS confirmed that domestic financial companies possess considerable capacity to withstand temporary shocks.

The FSS further explained that both domestic banks and non-bank financial companies have asset-liability structures different from SVB, as well as fundamental differences such as sound capital ratios, liquidity ratios, and robust profitability.

Governor Lee instructed to strengthen the inspection of emergency funding plans prepared by each financial company in preparation for potential increased volatility in international financial markets.

He also ordered checks on asset soundness and capital adequacy, including real estate project financing (PF) and loan delinquency rates, and emphasized the need to maintain liquidity and loss absorption capacity at levels sufficient to withstand crisis situations.

Additionally, the FSS stated that it will actively identify necessary regulatory improvements and communicate with the domestic virtual asset and fintech industries to ensure that funding supply is not constricted due to this incident.