Kim Joo-hyun, Financial Services Commission Chairman, "Should Utilize 'Short Selling Ban' If Necessary" (Comprehensive)

September Small Business Loan Extension Ends: "Continuing Exceptional Cases Is Not Advisable"
"Concerns Over Soundness Mainly in Secondary Financial Sector"

[Asia Economy Reporter Sim Nayoung] On the 11th, newly appointed Financial Services Commission Chairman Kim Juhyun, in a meeting with reporters immediately after his inauguration, addressed the demands from individual investors to ban short selling, stating, "Not only in Korea but also abroad, short selling bans are implemented when markets experience sudden changes," and added, "Depending on market conditions, if necessary, not only short selling but also support funds should be utilized."

Recently, as the Korean stock market has fallen sharply, individual investors have been demanding a temporary suspension of short selling. Although both domestic and international stock markets have declined due to concerns over a global economic recession, the drop in the KOSPI and KOSDAQ indices is notably significant among major stock markets.

Short selling refers to an investment technique where investors borrow stocks expected to decline in price, sell them first, and then repurchase the stocks at a lower price after a certain period to return them, profiting from the difference. When institutional or foreign investors with large capital use short selling, individual investors may suffer losses. For this reason, individual investors are calling for a ban on short selling.

Chairman Kim further stated, "While other sectors are deploying drones, if we want to do the same in our financial industry, we should do it," and added, "If the separation of banking and commerce (geumsan bunri) is cited as a reason not to proceed, then we need to consider relaxing this regulation." He reiterated that due to rapid changes in the financial environment driven by technological innovation, the regulation of geumsan bunri (which prohibits financial capital and industrial capital from owning or controlling each other's industries) should be adjusted if necessary.

At a press conference shortly after his appointment on the 7th of last month, he said, "If overseas financial companies are conducting certain businesses but Korean banks are not, we will remove any unjustifiable reasons for this," and added, "From the perspective of existing financial companies, if big tech companies are doing something that banks cannot, we will lift regulations where there is no valid reason."

Regarding the expiration of the loan repayment moratorium for small business owners in September, he said, "The basic idea is that it is not desirable to continue exceptional measures indefinitely," and added, "We need to thoroughly check from now whether it is acceptable to end the moratorium before the final decision on extension."

On the soundness of financial companies, he stated, "There are concerns mainly in the secondary financial sector," and noted, "Given the many uncertainties in the future, the authorities are carefully preparing and monitoring the situation."

Regarding the interest rate spread and interest income of commercial banks, he said, "Our society is going through tough times, and people may question whether it makes sense that banks are making a lot of money," and added, "This is the general sentiment of our citizens and also the political sphere, so if there are misunderstandings about the financial sector, we should explain the facts and do what we can."

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