Lee Bok-hyun "Korean Capital Market Faces Dual War Crisis... Must Not Miss Reform Opportunity"

Financial Supervisory Service and Korea Financial Investment Association Hold "Open Discussion for Revitalizing the Korean Stock Market"
"We Will Prepare Measures to Expand the Base for Long-Term Investment Demand"

Lee Bok-hyun, Governor of the Financial Supervisory Service, stated on the 6th, "Our capital market is facing a crisis of a 'Two-Front War' challenged by the gap with advanced markets and the virtual asset market, so we must not miss the opportunity for reform and execute it swiftly."

Lee Bok-hyun, Chairman of the Financial Supervisory Service, is delivering opening remarks at the "Open Discussion for Revitalizing the Korean Stock Market" held on the 6th at the Korea Exchange in Yeouido, Seoul. Photo by Yoo Hyun-seok

Governor Lee made these remarks while attending the "Open Discussion for Revitalizing the Korean Stock Market" held at the Korea Exchange in Yeouido, Seoul, on the morning of the same day. He said, "We must face the reality of the capital market coldly."

The discussion was jointly hosted by the Financial Supervisory Service and the Korea Financial Investment Association. It was organized to evaluate past efforts and achievements in advancing the capital market and to explore ways to strengthen the competitiveness of the Korean stock market.

Governor Lee analyzed that the Korean capital market is shrinking. He explained, "The supply of quality investment opportunities has been constrained due to concentration in specific industries and delays in the growth of innovative industries," adding, "The outflow of foreign funds and the concentration of individual investors in the U.S. market have weakened the investment demand base." He further noted, "Global trade frictions and technological hegemony competition are delivering direct blows not only to the real economy but also to the fundamentals of the capital market."

To overcome this, he emphasized the need to expand long-term investment demand, enforce the fiduciary duties of corporate executives to shareholders, and promptly advance capital market reforms.

He said, "The departure of the youth, who are the core investors of the future, from the domestic stock market is intensifying, threatening the growth potential of the Korean stock market," and added, "Long-term investment is an essential element for a virtuous cycle structure of market stability and investor wealth increase." He also stated, "The Financial Supervisory Service will cooperate with relevant ministries to prepare concrete measures to expand the long-term investment demand base."

He also stressed that corporate management rights are not 'rights' but 'duties' to the company and shareholders, and that corporate executives must be faithful to shareholders. He explained, "Conflicts between controlling shareholders and minority shareholders during last year's mergers and tender offers showed that arbitrary decision-making by management is no longer acceptable," adding, "Investor trust stems from transparent management and communication, and companies must actively reflect shareholders' voices in decision-making processes."

Finally, he said, "It is time to achieve results by leveraging the momentum of corporate governance improvements, including legal amendments to protect shareholder interests," and added, "With the urgency that this is the last chance, we must turn past policy efforts into 'substantial achievements.'"