Financial Services Commission Chairman: "Continuing Policy Efforts Amid Increasing Uncertainty in Complex Crisis Phase"

Kim Ju-hyun, Financial Services Commission Chairman, Holds Meeting with Economic and Financial Market Experts
Experts Unite in Calling for Active Response to Economic Recession

On the morning of the 25th, Kim Ju-hyun, Chairman of the Financial Services Commission, held a meeting with economic and financial market experts at the Government Seoul Office in Jongno-gu, Seoul, and discussed domestic economic and financial market trends and risk factors with the director of the International Financial Center and private experts related to the economy and financial markets.

[Asia Economy Reporter Song Hwajeong] Kim Juhyun, Chairman of the Financial Services Commission, diagnosed the current economic and financial market situation as a complex crisis phase where uncertainty is expanding due to overlapping factors such as global inflation, monetary tightening, geopolitical conflicts, and supply chain disruptions.

On the 25th, Chairman Kim held a meeting with economic and financial market experts at the Government Seoul Office and made these remarks. He said, "The financial market has been reflecting the complex crisis sensitively, with volatility continuously increasing," adding, "It is necessary to closely monitor and respond to factors that may increase volatility in the future, such as this week's U.S. Federal Open Market Committee (FOMC) interest rate decision, the second-quarter Gross Domestic Product (GDP) announcement, and the July Consumer Price Index of South Korea and the U.S. released in August."

Chairman Kim also explained the government's policy efforts. He stated, "We are continuously making policy efforts to mitigate financial market volatility and respond to potential risks in the financial sector," and added, "We will also steadily pursue policy efforts to support the resolution of financial difficulties faced by low-income, vulnerable groups, and borrowers at the margin, who are expected to face hardships."

Chairman Kim emphasized communication for effective policy response. He said, "For effective policy response, it is important to timely grasp the actual status of the financial market, which is not visible in statistics. Therefore, we intend to form a 'one team' with market experts to share the vivid market atmosphere without distortion and jointly diagnose and respond to market conditions."

The economic and financial experts attending the meeting unanimously agreed on the need for active response to the economic recession.

Choi Jaeyoung, Director of the International Finance Center, said, "It is necessary to set priorities for response policies and clearly present a blueprint for achieving goals," adding, "While maintaining a policy stance consistent with global tightening, it is important to clearly explain the pain experienced by economic agents during the process and suggest solutions." Director Choi also added, "Delicate policy responses to minimize the pain of economic agents that may arise during policy implementation are also necessary."

Seo Cheolsu, Head of the Research Center at Mirae Asset Securities, diagnosed, "As geopolitical conflicts expand, supply chain disruptions and restructuring due to economic and security bloc formation are likely to accelerate," and said, "Future industrial ecosystem restructuring caused by supply chain disruptions could have various ripple effects on the financial market, so it is necessary to prepare with a long-term perspective."

Park Seokgil, Economist at JP Morgan, identified inflation stabilization as the most important task. Economist Park said, "The possibility of a global economic recession is increasing until next year, and high uncertainty in the financial market will continue until the inflation trend stabilizes," emphasizing, "Despite the risk of economic slowdown, pursuing inflation stabilization through tightening is necessary for rapid financial market stabilization and economic recovery."

Kim Youngik, Professor at Sogang University Graduate School of Economics, said, "Our economy is suffering from the 'Samgo' (high inflation, high interest rates, high exchange rates) due to the global inflation impact," and predicted, "While 'Samgo' is expected to gradually ease due to monetary tightening in major countries, from next year, asset price bubble collapse and consumption slowdown will accompany, leading to a global economic recession centered on the U.S. economy."

Shin Yongsang, Head of the Financial Risk Center at the Korea Institute of Finance, emphasized the need for a two-track response to financial market risks and financial difficulties of vulnerable groups. Director Shin said, "In preparation for inflation and economic slowdown, it is necessary to focus on managing risks in vulnerable sectors such as household and self-employed debt and real estate finance, and proactively strengthen the loss absorption capacity of financial institutions," adding, "Along with financial support for livelihood stabilization, improving the efficiency of support for vulnerable groups through measures such as strengthening incentives for faithful repayment and improving the low-income financial support system should be pursued simultaneously."

There was also an opinion on the need for proactive policy responses to prevent liquidity crises in financial companies. Seo Youngsoo, Director at Kiwoom Securities, said, "With the rise in benchmark interest rates in major countries, the liquidity environment of financial companies is deteriorating, and the possibility of loan borrowers' default is increasing," adding, "It is necessary to prepare market stabilization measures such as in the bond market and promote debt restructuring to proactively respond to liquidity crises in financial companies."

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