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Lee Kyung-min

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Economy

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

Jan 20, 2021By Lee Kyung-min
Brokerages, insurers face stricter monitoring over foreign exchange exposure
Economy

Korea needs to join trans-Pacific partnership, draw foreign investment

Korea Development Institute (KDI) researcher Song Yeong-kwan speaks during a press briefing at the Sejong Government Complex, Tuesday. Courtesy of KDIBy Lee Kyung-min Korea should join a trade agreement among 11 countries in the trans-Pacific area to better navigate new U.S. trade conditions under Biden, a state-run think tank report said Tuesday.Joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), will help Korea diversify its trading partners, a move that could limit its vulnerability to uncertainties involving the current China-centered global value chain (GVC), Korea Development Institute (KDI) researcher Song Yeong-kwan said.The country's small and medium-sized enterprises (SMEs) in his view will in turn gain a competitive edge with their cheaper, quality products in certain niche markets, due in part to tariffs removed by countries that are signatories to the trade agreement.The move will also help Korea have a greater say in setting global standards in areas such as intellectual property within key legal frameworks yet to be established be

Jan 19, 2021By Lee Kyung-min
Korea needs to join trans-Pacific partnership, draw foreign investment
Economy

'Short-selling gains 39 times greater than retail leveraged trading'

gettyimagesbankBy Lee Kyung-minThe returns on short-selling were 39 times greater than retail, leveraged trading over the past three years, highlighting the expanded gap in stock gains between individual, retail investors and their large counterparts ― foreign and institutional investors, a study showed Monday.Short-selling refers to the sale of borrowed shares with the expectation of profiting from a price fall when the shares are bought back at a lower price. It's been widely used by foreign and institutional investors seeking leverage to net greater gains.This has intensified the call for the extension of a ban on the trading method, long criticized as an easy way for big players to make money at the expense of individual retail investors who are subject to stricter rules involving lending periods for and interest on borrowed shares.The temporary ban is set to expire March 15, about a year after it was put in place as an emergency measure to create a floor for the then-plummeting stock market at the very beginning of the COVID-19 pandemic.The study conducted by a team of researche

Jan 18, 2021By Lee Kyung-min
'Short-selling gains 39 times greater than retail leveraged trading'
Economy

Foreign residents left out of digital-oriented banking service

gettyimagesbankBy Lee Kyung-min Foreign residents are being left out of enhanced digital services, indicating Korea's much-touted digitization drive has yet to fully include a demographic which has been increasing in size and relevance in the country over the past few years. “I'm having a hard time understanding why expats should go to a bank in person to open an account, when Koreans can do it through the simple click of a button on a mobile app,” said a woman from overseas in her 20s who declined to be identified. She teaches English at a private cram school here.This is an experience shared by many foreign nationals living in Korea. It occurs due to the lack of a real-time identification verification system, an integrated system among government ministries and agencies put in place for Koreans to help speed up administrative processes that involve financial transactions or the handling of personal data. The Financial Services Commission (FSC) revised a related rule in late 2019 to allow foreigners to open a bank account online using an alien registration card, the Kore

Jan 18, 2021By Lee Kyung-min
Foreign residents left out of digital-oriented banking service
Economy

Fast debt pile-up feared to threaten Korean households

gettyimagesbank'Rapid increase in household debt may trigger gov't fiscal crisis' By Lee Kyung-min Concerns are mounting that the rapid increase in household debt could escalate into a financial crisis, as a sudden fall in the values of homes and stocks could put many overleveraged borrowers into default, experts warned Sunday. They said the Korean economy could fall into a vicious cycle whereby the financial status of lenders becomes compromised and worsens rapidly due to reduced fiscal headroom brought on by fast-growing government debt amid the COVID-19 pandemic.If debtors are unable to repay their loans following a sharp drop in the value of assets ― notably homes ― commercial banks will see their financial health deteriorate precipitously, prompting the government to intervene to prevent a chain reaction of defaults at financial institutions.However, a large number of defaults following steeper-than-expected asset price falls could overwhelm the government's fiscal tools, limiting the effectiveness of its crisis management capabilities and the economy will suffer as a resul

Jan 15, 2021By Lee Kyung-min
Fast debt pile-up feared to threaten Korean households
Economy

'Stock investment rational choice amid low-interest rate'

Korea Exchange (KRX) Chairman Sohn Byung-doo, left, speaks during a media conference at KRX, Seoul, Thursday. From right are KB Asset Management CEO Lee Hyun-seung, JPMorgan Chase Korea CEO Park Tae-jin, Korea Financial Investment Association (KOFIA) Chairman Na Jae-chul, Korea Capital Market Institute (KCMI) President Park Young-suk, SK Securities CEO Kim Shin, and Shinyoung Securities' research center chief Kim Hak-kyun. Courtesy of KRXLeveraged trading to be avoided to limit rapid lossBy Lee Kyung-min The recent bullish market, driven chiefly by individual retail investors, can be a well-informed, rational choice for some to boost their assets amid a record-low interest rate. In addition it could be inevitable given households can no longer expect interest income from savings, combined with receding earnings prospects from real estate investment due to heavier regulations notably tighter lending rules, a brokerage research center chief said Thursday.The stock investment craze in his view can be explained in part by Koreans increasingly embracing the once-shunned method of making m

Jan 14, 2021By Lee Kyung-min
'Stock investment rational choice amid low-interest rate'
  • President's fund pick draws investor attention
Banking & Finance

Woori Financial Capital swears in new CEO

Woori Financial Capital CEO Park Kyoung-hoon speaks at an online inauguration ceremony at the firm's headquarters in Seocho District, Seoul, Wednesday. Courtesy of Woori Financial CapitalBy Lee Kyung-minWoori Financial Capital held a ceremony on Wednesday inaugurating its new CEO, Park Kyoung-hoon, the vehicle-financing subsidiary of Woori Financial Group said Thursday.“Group synergy, digital innovation and strengthening internal capabilities will be our top priorities, a set of future-oriented goals to make a leap forward to become a competitive capital firm,” he said during an online ceremony at the firm's headquarters in Seocho District, Seoul.The company said it plans to pursue drastic changes and innovation to prepare for fierce competition in the vehicle-financing market, a daunting task due to the country's slow economic recovery, tight financial regulations and protracted COVID-19 pandemic. Park's management drive will place a greater emphasis on mutual growth with the group's other subsidiaries via closer integration, cooperation and digital innovation to st

Jan 14, 2021By Lee Kyung-min
Woori Financial Capital swears in new CEO
Economy

Is inflation returning with economic rebound?

gettyimagesbankFears grow over inflation in US, Europe after beginning of mass vaccinationSoaring won, delay in full vaccination more immediate concern for Korea By Lee Kyung-min Concerns about inflation are emerging on the back of hopes of an earlier-than-expected economic recovery sparked by the beginning last December of mass vaccinations against COVID-19 in some countries ― a dramatic turnaround from worries over deflation raised amid the economic meltdown brought on by the coronavirus pandemic. Some say it is too early to worry about inflation at a time when business activities are still in the doldrums and consumer price levels remain low. However, others argue that governments and central banks should take preventive action as inflation could occur sooner than expected due to the toxic cocktail of an astronomical amount of liquidity in the market and the potential worldwide economic recoveryInflation occurs when the prices of goods and services rise, an economic condition opposite to deflation defined by the decrease of those prices. The two are considered opposite sides of th

Jan 14, 2021By Lee Kyung-min
Is inflation returning with economic rebound?
Economy

Korea suffers biggest job losses since 1998 amid pandemic

Experts expect no rebound in coming monthsBy Lee Kyung-min Korea shed 218,000 jobs in 2020 from a year earlier due to the COVID-19 pandemic, the sharpest decline in employment in 22 years since 1998 when the Asia financial crisis wiped out over 1.27 million jobs, according to Statistics Korea data, Wednesday.On a monthly basis, 628,000 jobs disappeared in December amid strengthened social distancing measures following the third wave of the coronavirus, in a highly troubling continuation of the rapid job losses seen over the previous 10 consecutive months.Employment data in the forthcoming months are not expected to show a recovery fast since small- and medium-sized enterprises (SMEs) have remained shut for the past two months.On a monthly basis, the decline of ten consecutive months is the second-longest period of worsening unemployment since the 16 months from January 1998 to April 1999 following the Asian crisis.It also surpassed the previous eight consecutive months of decline from January through August in 2009 during the global financial crisis.Seoul National University economis

Jan 13, 2021By Lee Kyung-min
Korea suffers biggest job losses since 1998 amid pandemic
Economy

Resumption of short-selling politicized ahead of April election

gettyimagesbank By Lee Kyung-min A ban on short-selling, an emergency measure put in place in March 2020 to help create a floor for the then-plummeting stock market at the beginning of the COVID-19 pandemic, is increasingly becoming a political issue ahead of the upcoming by-elections in April. Ruling party lawmakers are stepping up their push for an extension of the ban set to expire March 15, despite Monday's announcement by the Financial Services Commission (FSC) that made clear it will allow the resumption of the financial investment method. Whether the financial authorities will make a policy course correction remains to be seen as the FSC has yet to produce any material improvement in strengthening the punishment for illegal short-selling and granting greater accessibility for individual investors to the financial investment method. Short-selling refers to the sale of borrowed shares with the expectation of earning profits from a price fall when the shares are bought back at a lower price. It is widely used by foreign and institutional investors seeking leverage

Jan 12, 2021By Lee Kyung-min
Resumption of short-selling politicized ahead of April election
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