Regulator to focus on market risk management, financial stability
The logo of Financial Services Commision is seen in this Dec. 2, 2019 file photo. Korea Times photo by Jang Jae-jin
Korea's financial regulator said Wednesday that it will redouble efforts to cope with volatility in the financial market as well as to curb household debts this year.
In a joint policy report, the Financial Services Commission (FSC) said that the financial markets are highly likely to face increased volatility given the incoming Trump administration's shift in a slew of policies, an economic slowdown and the political upheaval stemming from the impeachment of President Yoon Suk Yeol following his short-lived martial law declaration.
The FSC said it will implement an around-the-clock monitoring system to detect and deal with market volatility and will step in to minimize market fluctuations if necessary.
In particular, some 100 trillion won worth of market stabilization measures will be in place to minimize any market volatility.
In addition, the financial regulator said it will implement stricter curbs to rein in household loans.
Higher rates will be applied to mortgage loans from July by reviewing borrowers' debt service capacity, which will work to cut loan demand.
Banks' outstanding household loans increased 1.9 trillion won in November from a month earlier, rising for an eighth consecutive month, but it logged the slowest growth since March.
Also, the FSC will accelerate efforts to restructure project financing (PF) loans, one of the nagging points that could sharply hurt the country's financial stability.
By June, the regulator plans to recapitalize, sort out, or write off 16.2 trillion won worth of PF loans, which is equivalent to 77.5 percent of soured PF loans. (Yonhap)