Executive Meeting Held to Review Financial Market Status and Discuss Response Measures
Hotlines with Overseas Offices Activated; Enhanced Market Monitoring Implemented
Lee Chanjin, Governor of the Financial Supervisory Service, ordered the formation of a "Middle East Emergency Response Task Force (TF)" and the full mobilization of supervisory capabilities to ensure financial market stability on March 3, in preparation for a prolonged period of instability in the Middle East following the US airstrikes on Iran. The Financial Supervisory Service will also establish a 24-hour response system by operating hotlines with its overseas offices and local subsidiaries of financial institutions.
On the morning of the same day, Governor Lee convened an executive meeting to assess the impact of the Middle East crisis on domestic and international financial markets and discussed future response measures, including the above-mentioned initiatives.
He stated, "If the situation in the Middle East is prolonged, we are concerned about rising international oil prices and increased volatility in financial markets," and urged the agency to remain highly alert and focus its supervisory capabilities on stabilizing the financial market.
As an initial step, Governor Lee formed the Middle East Emergency Response Task Force, headed by Senior Deputy Governor Lee Sehun. He also called for the seamless implementation of phased stabilization measures in accordance with the agency's internal emergency response plan.
To that end, the agency plans to operate hotlines with overseas offices and local subsidiaries of financial institutions to maintain a 24-hour response system, and will strengthen monitoring of the stock, bond, and short-term money markets, as well as trends in the inflow and outflow of foreign currency funds.
Governor Lee also instructed financial institutions to strengthen their management of foreign currency asset and liability positions in preparation for increased volatility in the foreign exchange market, and to review the effectiveness of credit lines and emergency funding plans.
He further emphasized the need for thorough measures, including: daily checks of supply and demand in the domestic stock and bond markets and, if necessary, joint responses with relevant authorities; monitoring the funding status of companies operating or transacting in the Middle East; and strengthening internal checks to prevent cyber hacking attempts and IT system failures that could exploit international political instability.
A Financial Supervisory Service official stated, "We will operate the agency's internal emergency response system 24 hours a day until the Middle East situation stabilizes," adding, "We plan to respond actively to crisis situations by working closely with the government, the Bank of Korea, and other relevant agencies."
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