Financial Services Commission Chairman: "Stock Volatility Increase Is Not Solely Due to Short Selling"

"Role of Banks with Record-Breaking Profits Requires Further Consideration"

Kim Ju-hyun, Chairman of the Financial Services Commission, is visiting the Seoul Financial Welfare Center Youth Companion Center in Gangnam-gu, Seoul on the 7th and touring the facility. Photo by Kang Jin-hyung aymsdream@

Kim Joo-hyun, Chairman of the Financial Services Commission, commented on the significant fluctuations in the stock market over the two days following the complete ban on short selling implemented on the 6th, stating, "There are many factors behind yesterday's rise and today's fall," and added, "Short selling (ban) could be one of the factors, but I do not agree that it is the sole reason." Chairman Kim made these remarks on the 7th after visiting the Seoul Financial Welfare Counseling Center and listening to reports on illegal financial damages affecting youth and vulnerable groups, during a meeting with reporters.

On the first day of the full short selling ban on the 6th, a program buy order sidecar was temporarily triggered in the KOSDAQ market, and on the 7th, a program sell order sidecar was activated. In response to criticism that the financial authorities' shift from opposing to supporting the full short selling ban was a populist policy ahead of the general election, Kim said, "There was suspicion that short selling by major foreign institutions was almost habitual, and it was judged that fair price formation was difficult, so the measure was taken." He added, "Some may raise timing issues depending on their perspective, but since the legal requirements were not met, this is not a measure that can be used for political purposes or to appease public opinion."

Regarding President Yoon Seok-yeol's remark about 'being a servant to banks' and the subsequent social contribution plans, Kim stated, "It is true that banks have made record profits," and explained, "Since banks are earning profits mainly from interest rates, it contrasts with the suffering of ordinary people due to interest rates, which is why there is talk about the need for banks' social contribution." He added, "Many agree that banks should play an active role, but how to do so requires further consideration." When asked about the win-win finance plans sequentially proposed by Hana Financial Group and Shinhan Financial Group, Chairman Kim responded, "Do you think that is sufficient?"

When questioned whether the financial authorities' message to 'curb household loans' conflicts with demands to 'expand financial support,' Kim said, "Considering the conditions the government faced upon its launch, the range of policy options available was not wide," and continued, "In broad terms, it is naturally necessary to prevent a rapid increase in household debt, but when looking at the details, financial support for vulnerable groups must continue."