'Failed Impeachment' Spurs Financial Instability... FSC Holds Series of Meetings with Savings Banks and Credit Finance Companies

Request to Secure Available Liquidity and Recheck Emergency Response System

Amid increased volatility in the financial markets following President Yoon Suk-yeol's emergency martial law situation and the National Assembly's failed impeachment attempt, the Financial Supervisory Service (FSS) has consecutively held meetings with CEOs of savings banks, credit card companies, and capital companies, urging them to secure available liquidity and re-examine emergency response systems.

Financial Supervisory Service building in Yeouido, Seoul. Photo by Younghan Heo younghan@

On the 10th, the FSS held a meeting with CEOs of savings banks, credit finance companies, and associations to review risk factors in each sector and discuss response strategies in light of recent financial market volatility. After concluding discussions with CEOs of savings banks such as KB, SBI, Geumhwa, Moa, Aequan, Welcome, and Korea Investment, the FSS consecutively convened CEOs from seven credit card companies including Shinhan, KB, Samsung, Hyundai, and capital companies such as Hyundai, KB, and Lotte to discuss response directions.

The FSS assessed that total deposits at savings banks stood at 102.8 trillion won as of the 6th, maintaining typical fluctuations without significant changes, and that available funds to cover deposit withdrawals were held at appropriate levels. It also reported that issuance of credit finance bonds and foreign currency funding by credit finance companies were proceeding smoothly, indicating stable funding and business operations. Hyundai Capital even issued 700 million dollars worth of foreign currency asset-backed securities (ABS) despite the year-end period typically having low investment demand.

During the meeting, the FSS urged each sector to secure sufficient available liquidity, re-examine emergency response systems, and promptly resolve non-performing assets, while emphasizing meticulous management to ensure that financial supply to vulnerable borrowers is not contracted.

Deputy Governor Kim Byung-chil stated, "Please proactively manage liquidity by re-examining sufficient available liquidity and emergency funding plans for each financial company," adding, "Savings banks should thoroughly prepare by re-examining the triple-layered liquidity response system to ensure smooth handling in emergencies."

He also called for active resolution of non-performing assets. Deputy Governor Kim emphasized, "If non-performing asset resolution is handled passively to avoid immediate losses, prolonged deterioration of asset soundness could lead to greater risks," and urged, "Please actively engage in asset soundness improvement measures such as light auctions and sales to gain market trust."

Furthermore, he requested that any unusual findings during monitoring of credit finance bond issuance and savings bank deposit trends be promptly shared with supervisory authorities, and highlighted the need for balanced management to prevent financial difficulties among vulnerable borrowers such as those with medium to low credit ratings.

Meanwhile, at the meeting, the savings bank sector stated that it would maintain a risk management-focused business strategy rather than expanding operations for the time being, and continue efforts to improve soundness by swiftly implementing restructuring and resolution plans for ongoing project financing (PF) sites. The credit card and capital sectors also responded that they would continue to fulfill their role in providing financial services to the public based on stable funding conditions, while securing sufficient asset soundness and loss absorption capacity.