Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Top financial regulator vows to prevent panic-driven bank run
Financial Services Commission (FSC) Chairman Kim Joo-hyun speaks during a press conference at the government complex in Seoul, Friday, marking the one-year anniversary of his taking the post in July last year. Yonhap
By Anna J. Park
FSC chief deposits 60 million won at Saemaeul Finance to calm market
By Anna J. Park
Financial Services Commission (FSC) Chairman Kim Joo-hyun urged the public, Friday, to ignore groundless rumors that distort facts and prompt panic, and have faith in the government. The message was aimed at stabilizing the markets with respect to growing concerns over the financial soundness of the Korean Federation of Community Credit Cooperatives (KFCC), also known as MG Community Credit Cooperatives.
“As the top financial regulator responsible for the country's financial system, I'd like to stress once again that the Korean government will guarantee that the public won't experience any loss in their savings by employing every possible policy tool,” Kim said during a press conference marking the one-year anniversary of his time in office.
He called on the public not to be swayed by some YouTubers who distort facts, asking them not to miss out on tax benefits and interest income by withdrawing their deposits from the KFCC out of unfounded fears.
“Some YouTubers say savings in the KFCC are not safe, as they're not protected by the Korea Deposit Insurance Corporation (KDIC). But that is not true. The KFCC protects up to 50 million won ($38,000) per individual, which is the same protection as any other bank in Korea, according to the Community Credit Cooperatives Act,” he stressed. “Please do not believe YouTubers, but have faith in the government.”
Financial Services Commission (FSC) Chairman Kim Joo-hyun deposits 60 million won ($46,000) at a KFCC branch in Seoul, Friday. Courtesy of FSC
The top financial regulator explained that the KFCC has never had any difficulty returning clients' savings in its decades of operation, and the current situation is not as bad as the previous Asian financial crisis in the late 1990s or the global financial crisis during the late 2000s.
The FSC chief also deposited 60 million won at a KFCC branch in Seoul later in the day to calm public fears. The amount of money he deposited was 10 million won more than the maximum amount that the KFCC guarantees a full refund for in case of emergency.
The financial authority plans to draw up measures to block systemic risks of a bank run. Kim said highly advanced digitalization of banks accelerates the spread of unprecedented crisis, and the government will introduce measures in concerted moves with KDIC and the BOK to stem digital bank runs.
Financial Services Commission (FSC) Chairman Kim Joo-hyun speaks during a press conference at the Government Complex in Seoul, Friday, marking the one-year anniversary of his time in office. Yonhap
Regarding the highly indebted Koreans who are suffering from interest rate hikes and economic uncertainties, the financial authority will expand various types of financial products aimed at them. One such measure is to increase the aggregated amount of small-loan finances to 11 trillion won from the current 10 trillion won.
“A comprehensive set of measures to provide stable and ample liquidity to those in need will be announced during the second half of this year,” the FSC chief said.
The FSC will also ease regulations in area of digital convergence and global expansion during the second half, aiming to foster further growth of financial companies in the global markets.
“As the world's 10th-largest economy, companies are now required to make forays into overseas markets to maintain current growth. The FSC is considering which measures will be necessary to facilitate their expansion into the global market,” Kim said.
Kim pledged to continue working closely with other financial authorities ― the Bank of Korea, the Financial Supervisory Service (FSS) and the Ministry of Economy and Finance ― to stabilize the economy and markets. He attributed the successful maintaining of financial market stability to close cooperation with the institutions since he took office a year ago.