Mention of Private Expanded Executive Meeting
The Macroeconomic Financial Meeting, where financial authorities' leaders discuss South Korea's macroeconomy, was held on the 1st at the Bankers' Hall in Seoul. Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, is delivering the opening remarks. From left to right: Lee Bok-hyun, Governor of the Financial Supervisory Service; Lee Chang-yong, Governor of the Bank of Korea; Deputy Prime Minister Choi; and Kim Byung-hwan, the newly appointed Chairman of the Financial Services Commission. Photo by Heo Young-han younghan@
As fears of a recession originating from the United States spread to global asset markets causing capital outflows, Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok urged maintaining a special response system on the 5th.
At the expanded meeting of the Ministry of Economy and Finance on the 5th, Minister Choi evaluated, "Uncertainties such as geopolitical instability in the Middle East still persist," and "Volatility in global financial markets has significantly increased due to heightened concerns over the US economic slowdown."
He then instructed, "Please maintain a 24-hour monitoring system with high vigilance together with related agencies," and "In case of necessity, closely cooperate and respond according to the contingency plan."
Last week, global stock markets plunged sharply amid amplified anxiety caused by fears of recession triggered by US manufacturing contraction and employment shocks, as well as bubble concerns surrounding Big Tech companies, led by the Magnificent Seven that have driven the US stock market.
The New York stock market saw the Nasdaq plunge 2.4% on the 2nd due to heightened recession fears following worsening employment data. Reflecting US-originated negative factors, the Korean stock market also experienced historic crashes with the KOSPI down 3.6% and the KOSDAQ down 4.2%. Japan’s Nikkei index fell 5.8%, and Hong Kong’s Hang Seng index also recorded a sharp decline in the 2% range.
On the morning of the same day before the Korean stock market opened, the Ministry of Economy and Finance held a conference call chaired by the Vice Minister to stabilize the market, but after the opening, the KOSPI index plunged sharply, triggering a temporary suspension of program trading orders (sidecar mechanism).
The government stated, "Amid increased volatility in global financial markets and persistent uncertainties such as the resurgence of geopolitical instability in the Middle East, the government and the Bank of Korea have decided to maintain a joint 24-hour monitoring system for domestic and international financial markets with high vigilance." They also added that related agencies will closely cooperate and respond according to the contingency plan if necessary.
The government further added, "We plan to continue efforts to strengthen the resilience of our capital and foreign exchange markets and expand external safety nets by steadily implementing corporate value-up programs, advancing foreign exchange and bond markets, and expanding supply chains."
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