[1mm Financial Talk] Banking Sector Troubled by 'Badgeul'... Strong Response with "Personnel Measures"

Financial Sector Leaders' Terms Ending Amid Market Uncertainty
Various Rumors in 'Badgeul' Format Spread Amid Chaos
"Personnel Actions If Involved in Spreading False Information" Warning Issued

[Asia Economy Reporter Song Seung-seop] The financial sector is struggling with so-called ‘bad rumors’ known as jirasi. With many financial sector heads nearing the end of their terms and market conditions unstable, baseless rumors are rampant. Financial companies have responded by tightening internal employee confidentiality and resorting to public reporting to financial authorities.

According to the financial sector on the 10th, Financial Company A distributed a document titled ‘Guidelines for Employee Conduct’ to all branches earlier this month. The document strictly prohibits posting speculative content, making statements that damage the company’s reputation in official or unofficial settings, spreading malicious rumors, and defaming specific employees or organizations. It warned that anyone involved in spreading false information or amplifying and reproducing such content would face severe personnel actions.

Following the sudden warning, employees speculated that the document was closely related to recent developments in the financial sector. Financial Company A had recently faced turmoil as jirasi concerning the CEO’s whereabouts, reputation, and term circulated frequently. As some of the content appeared to be false or possibly created by internal members, the company took measures to tighten employee confidentiality.

Securities firms are taking a tough stance by directly reporting rumors to the Financial Supervisory Service (FSS) and publicly announcing these actions. On the 20th of last month, Daol Investment & Securities reported to the FSS joint inspection team after rumors of a sale circulated in the form of information sheets, labeling them as “false information.” The next day, Hanyang Securities publicly disclosed that it had reported to the FSS that the company sale rumors were “completely untrue.” It is considered unusual for financial companies to respond to every rumor and publicly disclose their direct reports to the FSS.

The FSS has started operating a joint inspection team with the Korea Exchange to closely monitor and respond to the spread of malicious rumors. They plan to focus on cracking down on baseless credit and liquidity crisis rumors, bankruptcy rumors, and sale rumors that mention individual companies by name. False information related to corporate bonds or asset-backed commercial paper (ABCP) bond markets is also targeted.

The financial sector is particularly sensitive to jirasi because the current financial situation is unstable. In crisis situations such as interest rate hikes, real estate market downturns, and liquidity shortages, incorrect information can cause significant harm to individual companies or the entire market. During the 2018 stock market crash, a domestic bank faced rumors of being involved in ‘North Korea remittance secondary boycott (third-party sanctions),’ prompting financial authorities to quickly intervene. Regardless of the truth, continuous spread of jirasi can exacerbate market instability.

The FSS emphasized, “We will take strict action against those who deliberately spread rumors for personal gain by exploiting the sense of crisis,” and added, “If market disruption or fraudulent trading using malicious rumors is detected, we will promptly refer the cases to investigative authorities.”

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