Brokerages, insurers face stricter monitoring over foreign exchange exposure
Kim Seong-wook, left, director general for international finance bureau at the Ministry of Economy and Finance, speaks during a press briefing at Sejong Government Complex, Tuesday, Courtesy of Ministry of Economy and FinanceMonitoring of dollar demand, short-term borrowing in swap market, overseas asset operation maturity are top priorities By Lee Kyung-min Korea plans to beef up the monitoring of foreign exchange liquidity conditions at non-banking financial firms, including brokerages and insurers, to prevent potential market turmoil caused by a dollar shortage, the Ministry of Finance and Economy said Wednesday.Under the plan, non-banking financial firms will be required to submit a monthly plan on borrowing U.S. dollars, including ways to counter a sudden spike in demand for the key reserve currency brought on by unforeseen risks.Their foreign currency exposure will be calculated by net overseas assets divided by total overseas assets using a method the finance ministry created to measure the financial health of non-banking financial firms.“The extreme volatility seen in t
