Financial Supervisory Service Holds Financial Situation Review Meeting
Lee Bok-hyun, Governor of the Financial Supervisory Service, stated on the 12th, "Since we have been working to enhance the soundness of financial companies and expand their loss absorption capacity, the current situation is such that we can sufficiently withstand recent domestic and international market instability factors," adding, "We must not lower our guard in preparation for any eventuality and carefully monitor the field."
On the 5th, Lee Bok-hyun, Governor of the Financial Supervisory Service, held a back briefing regarding the Saemaeul Geumgo illicit loan suspicion incident after the signing ceremony of a business agreement between the telecommunications and financial sectors to strengthen response and cooperation against financial crimes infringing on people's livelihoods, held at the Korea Federation of Banks in Jung-gu, Seoul. Photo by Jo Yong-jun jun21@
Governor Lee made these remarks during a financial situation review meeting held that morning, where he checked major risk factors such as the U.S. inflation rate and rising oil prices exceeding market expectations and ordered countermeasures.
He assessed, "Although domestic bond yields are rising, credit spreads are narrowing, and in the short-term money market, ABCP refinancing rates are declining, indicating that the financial market is generally stable."
He continued, "To prevent market volatility from expanding due to project financing (PF) related risk factors, we must faithfully implement the revision of business feasibility evaluation standards and the cleanup and restructuring of distressed projects," emphasizing, "It is also necessary to communicate sufficiently with bond financing companies, real estate trust companies, and construction firms to prevent vague anxiety among stakeholders."
Additionally, Governor Lee said, "Financial companies should maintain sufficient capital ratios to withstand changes in market conditions by meticulously checking their soundness status and, if necessary, conducting interviews with management as part of proactive efforts," and added, "In particular, to prevent the risk of defaults among low-credit groups from rising excessively due to the prolonged high interest rates, we will encourage the active use of preemptive debt adjustment systems in the financial sector."
Governor Lee also stated, "We will closely examine the impact of sustained high interest rates and high oil prices on our corporate sector and guide risk management proactively through corporate credit risk assessments," and said, "We will respond to ensure that credit risk management and unfair trading practices do not occur by monitoring the flow of funds into high-risk assets such as virtual assets."
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