Financial Supervisory Service to Hold Expanded Financial Situation Review Meeting on the 19th
Lee Bok-hyun, Governor of the Financial Supervisory Service, emphasized on the 19th the importance of being prepared to immediately implement all market stabilization measures according to pre-established response plans for various scenarios during sudden market fluctuations.
Governor Lee held an expanded financial situation review meeting immediately after the U.S. Federal Open Market Committee (FOMC) meeting to discuss response measures. The meeting was convened right after the FOMC showed a hawkish stance by reducing the expected number of interest rate cuts next year from four to two. The market had anticipated either maintaining four rate cuts or reducing them to three next year.
Governor Lee forecasted, "As the U.S. Federal Reserve (Fed) adopts a considerably cautious attitude toward the path of rate cuts next year, short-term market volatility is expected to increase due to rising market interest rates and a stronger exchange rate." He added, "This is a very important period that will determine the direction of our economy and finance," emphasizing the need for stable market management alongside the smooth implementation of key issues and policies.
In particular, regarding key issues, he instructed a thorough review of financial companies' emergency response plans and crisis response capabilities to prepare for unexpected interest rate and exchange rate volatility. He also urged encouragement to ensure that plans to improve the soundness indicators of small and medium-sized financial companies are carried out without disruption. Issues such as the soft landing of real estate project financing (PF), insurance reform tasks, and capital market advancement plans will also proceed as originally planned.
Governor Lee stated, "We will proactively prepare for the policy shift next year to ensure that the public can feel the effects of the policies by re-examining the direction and role of financial supervision." To this end, measures to support livelihoods, including small business owners, self-employed individuals, and local real estate, will be developed, and the process by which the base interest rate cuts are passed on to loan interest rates will also be reviewed.
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