Government's 'Emergency Stock Market Panic Check'... "Excessive Anxiety Spreading"

Emergency Meeting of Economic and Financial Authorities Heads

Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok is presiding over an urgent macroeconomic financial issues meeting related to recent domestic and international financial market trends at the Banking Hall in Jung-gu, Seoul on the 6th.

The government evaluated the simultaneous plunge in major Asian stock markets as a result of excessive anxiety spreading due to multiple overseas adverse factors, stating that it has "sufficient policy response capabilities" to handle (market volatility).

On the 6th, the government held an emergency macroeconomic and financial issues meeting chaired by Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok, attended by Bank of Korea Governor Lee Chang-yong, Financial Services Commission Chairman Kim Byung-hwan, Financial Supervisory Service Governor Lee Bok-hyun, and Presidential Office Economic Secretary Park Chun-seop, to closely examine the panic conditions in major countries.

The government assessed that the U.S. stock market sharply declined in the latter half of last week due to overlapping factors such as concerns over economic slowdown from weak July employment data, worries about Big Tech companies' earnings, unwinding of yen carry trades following the Bank of Japan's interest rate hike, and renewed instability in the Middle East.

The attendees diagnosed that "while the U.S. market's assessment of these factors was insufficient, Asian stock markets, including Korea's, overreacted as they began to collapse first after the weekend."

They further explained, "Unlike past sharp declines where real economy, stock, foreign exchange, and bond markets were all significantly impacted, this adjustment is an unusual situation where only the stock market is affected due to overseas shocks."

Deputy Prime Minister Choi stated that given the heightened external uncertainties such as the resurgence of geopolitical instability in the Middle East and the U.S. presidential election, related agencies will maintain the highest level of vigilance and continue operating a 24-hour joint monitoring system for the time being.

He emphasized, "As our economy gradually shows signs of recovery, the foreign exchange and capital markets are also demonstrating favorable trends, and the government and the Bank of Korea have sufficient policy response capabilities to address market volatility caused by external shocks."

Deputy Prime Minister Choi also urged, "Market participants need to be cautious about the excessive spread of anxiety and make calm and rational decisions."