Financial Supervisory Service Calls Securities Firms to Inspect Real Estate PF Risks

Private Meeting with 9 Securities Firms on the Morning of the 9th
Discussion on Preventing Additional PF Losses and New Supply Incentives

The Financial Supervisory Service (FSS) has taken the step of meeting with securities firms to promote the restructuring of real estate project financing (PF) sites.

On the morning of the 9th at 10 a.m., the FSS held a private meeting with chief risk officers (CROs) and heads of PF business divisions from nine securities firms. The meeting was attended by nine comprehensive financial investment firms (jongtusa) with over 3 trillion won in equity capital, including Mirae Asset Securities, Korea Investment & Securities, and NH Investment & Securities.

At this meeting, the FSS reportedly discussed measures to prevent additional losses related to real estate PF in the securities industry and ways to provide incentives for new project supply.

Since the 8th, the FSS has begun meetings with commercial banks, secondary financial institutions, and the insurance sector to assess the status of PF sites and discuss the activation of auctions and public sales. The meetings with securities firms are part of this effort, according to an FSS official.

Once the financial sector meetings conclude this month, the FSS plans to announce business feasibility evaluation criteria related to PF normalization and amendments to creditor agreements, with implementation starting in the third quarter. The FSS explained that PF sites with low business feasibility can be normalized through restructuring.