The Bank of Korea Relaunches the 'Global Financial Regulation Newsletter' After 2 Years

Lee Chang-yong, Governor of the Bank of Korea, is entering a press conference held at the Bank of Korea in Jung-gu, Seoul on the 26th of last month. On the same day, the Monetary Policy Committee of the Bank of Korea raised the base interest rate by 0.25 percentage points from 1.50% to 1.75%.
/Photo by Joint Press Corps

The Bank of Korea announced on the 20th that it will republish the 'Global Financial Regulation Newsletter' after two years.

This newsletter contains information on the current status of global financial regulations and financial stability discussions held by organizations such as the Financial Stability Board (FSB) and the Basel Committee on Banking Supervision (BCBS).

Its purpose is to help domestic financial institutions better understand the trends in global prudential regulations and to actively respond to enhance the competitiveness of Korea's financial sector. The Bank of Korea plans to publish this newsletter at the end of each quarter going forward.

The newsletter published in the second quarter included analyses of vulnerabilities in emerging market countries related to US dollar funding, measures to mitigate the risks of rapidly increasing private sector debt after COVID-19, benefits and risk factors of decentralized finance (DeFi), and the necessity of introducing central bank digital currencies (CBDCs).

According to the newsletter, since the 2008 global financial crisis, external funding in emerging market countries has been characterized by a focus on US dollar funding, expansion of funding through non-bank financial institutions (NBFIs), and increased complexity of external funding networks.

After the shock of COVID-19, emerging market countries have quickly regained stability thanks to accommodative monetary policies by central banks worldwide, but the recovery of capital outflows from emerging markets remains slow.

The Bank of Korea explained, "Policies are needed to enhance the financial system resilience of emerging market countries, such as resolving currency mismatches, resolving liquidity mismatches, crisis management frameworks, and reducing data gaps for risk monitoring."

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