Kim So-young, Vice Chairman of the Financial Services Commission, "Concerns over Economic Recession Grow... Financial Firms Must Strengthen Loss Absorption Capacity"

Financial Risk Review Meeting Held on the 18th

[Asia Economy Reporter Sim Nayoung] Newly appointed Kim Soyoung, Vice Chairman of the Financial Services Commission, held a financial risk inspection meeting at the Government Seoul Office on the morning of the 18th and said, "The domestic and international economic and financial environment surrounding our country is challenging," adding, "Market concerns about an economic recession are growing."

Vice Chairman Kim stated, "As external risks such as the recent continuation of high inflationary pressures leading to major countries' monetary tightening, the prolonged Russia-Ukraine war, and China's lockdowns increase, market concerns about an economic recession are growing,"

"Stock prices are falling, and exchange rates and interest rates are rising, leading to increased overall financial market volatility, which is expected to continue for some time."

He said, "Given the serious situation where domestic and external risks are appearing simultaneously, it is necessary to respond closely to the immediate financial instability factors," adding, "We must closely monitor financial market movements to timely detect risk factors and manage them so that market anxiety does not spread excessively."

He also emphasized, "It is necessary to carefully promote support for vulnerable groups who may face increased difficulties during the interest rate hike phase, aiming for a smooth landing of household and self-employed debts that surged during the COVID-19 response," and stated, "The financial authorities will do their best in preventive efforts to ensure that increased market volatility does not spread to financial company failures or systemic risks in the financial market."

He continued, "Financial companies also have the responsibility to equip themselves with sufficient loss absorption capacity and to make efforts to manage risks independently," and urged, "To prevent a repeat of cases where liquidity crises in some financial companies, which appeared at the early stage of the COVID crisis, transferred to financial market instability, primary risk management efforts by financial companies are necessary."

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