Financial Supervisory Service Implements 24-Hour Monitoring System for 'Middle East Risk'... "Limited Impact on Financial Markets"

The Iranian Revolutionary Guard Corps launched a missile attack at dawn on the 8th (local time) on a US military base in Iraq.
Photo by Yonhap News

[Asia Economy Reporter Kim Hyo-jin] The Financial Supervisory Service (FSS) announced on the 8th that, amid rising concerns over the domestic financial market due to the conflict between the United States and Iran, it will maintain a 24-hour monitoring system centered on market-related departments in coordination with overseas offices.

On the same day, the FSS held a "Market Situation Monitoring Meeting" chaired by Senior Deputy Governor Yoo Kwang-yeol, attended by heads of market-related departments, where this policy was decided.

The FSS considers that the impact of the US-Iran conflict on the domestic financial market is still limited, given that the exposure of Korean financial companies to Iran stood at a minimal $200,000 as of the end of September last year, and foreign investors continue to maintain a net buying stance.

The FSS also explained that banks' foreign currency liquidity and external soundness indicators such as the CDS premium (23 basis points as of the 17th) are favorable. The CDS premium is an indicator of the risk of sovereign default; the lower the CDS premium, the lower the default risk. Korea's CDS premium has remained at its lowest level since 2008.

However, the FSS stated that although financial market volatility had somewhat eased due to the US-China trade agreement reached at the end of last year, it could expand again with the emergence of new threats, and it will closely monitor market trends amid geopolitical risks originating from the Middle East.

This content was produced with the assistance of AI translation services.