Kim Byunghwan "We Must Be Prepared for Market Stabilization Measures"
Lee Bokhyun "Hasty Decisions Should Be Avoided Due to Fear"
Financial authorities held an emergency market inspection meeting in response to the sharp decline in the domestic stock market. With the heads of financial authorities, including Financial Services Commission Chairman Kim Byung-hwan and Financial Supervisory Service Governor Lee Bok-hyun, all in attendance, participants diagnosed that the drop was excessive compared to actual market conditions.
On the afternoon of the 5th, the Financial Services Commission and the Financial Supervisory Service held an emergency market inspection meeting at the Government Seoul Office Building together with related organizations such as the Korea Exchange to discuss the recent increase in stock market volatility. Participants judged that global stock markets were significantly shaken as concerns over a U.S. economic recession emerged ahead of the major countries' monetary policy transition period. They particularly analyzed that Asian markets such as Japan and Taiwan experienced large declines, and evaluated that the Korean stock market's drop was excessive compared to the real economy or financial market conditions.
Kim Byung-hwan, Chairman of the Financial Services Commission, is speaking about the four major risk factors and future response measures at the Financial Risk Inspection Meeting held on the morning of the 5th at the Bankers' Hall in Jung-gu, Seoul. [Image source=Yonhap News]
The financial authorities emphasized the need to be cautious of excessive spread of anxiety or herd behavior to prevent the stock market volatility from expanding excessively. Financial Services Commission Chairman Kim Byung-hwan stated, "Our economy maintains a stable growth trend and has sufficient capacity to respond to external adverse factors, so it is a time when market participants need to make calm and rational decisions." He added, "Please closely monitor the stock and foreign exchange markets and be prepared to take immediate market stabilization measures if necessary."
Furthermore, regarding the Korean stock market's excessive reaction to external adverse factors, he mentioned the need for a 'structural improvement.' Financial Supervisory Service Governor Lee Bok-hyun explained, "We have been strengthening risk management to prepare for the risk of increased market volatility," adding, "Accordingly, the asset soundness, capital adequacy, and foreign exchange soundness of domestic financial companies are in a very stable condition." He emphasized, "While we must remain vigilant and respond to the current situation, it is a time to carefully and rationally evaluate the fundamentals of our financial market rather than making hasty investment decisions driven by excessive fear."
On that day, the KOSPI closed at 2,441.55, down 234.64 points (8.77%) from the previous session due to fears of a U.S.-originated economic recession. The KOSDAQ index also closed at 691.28, down 88.05 points (11.3%).
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