Lee Bok-hyun, Financial Supervisory Service Chief, "Focusing Supervisory Capabilities on Stabilizing Short-term Finance and Corporate Bond Markets"

Bank Federation Building 'Research Institute Heads Meeting'
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Financial Supervisory Service Governor Lee Bok-hyun is delivering opening remarks at the Financial Supervisory Service Governor-Research Institute Heads Meeting held at the Bankers Hall in Jung-gu, Seoul on the 7th. Photo by Kim Hyun-min kimhyun81@

On the 7th, Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), emphasized, "We will focus our supervisory capabilities on stabilizing the short-term financial market and the corporate bond market."

Governor Lee attended the 'Research Institution Heads Meeting' held at the Bankers' Hall in Jung-gu, Seoul, and stated, "Although the bond market has somewhat stabilized, anxiety may resurface in the future, so we will closely monitor the situation with vigilance and respond promptly if market instability occurs."

Governor Lee said, "Regarding the soundness of financial companies, we will inspect real estate project financing (PF) sites and corporate funding conditions to ensure smooth capital supply to normal projects and companies," adding, "We will also continue to promote strengthening risk management and capital expansion in financial companies." He also mentioned, "We plan to alleviate the rapid capital concentration caused by reverse money moves."

Regarding the current global financial market, he evaluated, "Just as COVID-19 seemed to be ending, the Russia-Ukraine war broke out, and we experienced high inflation rates. As major countries respond with tight monetary policies, volatility in exchange rates, stock prices, and interest rates has increased, and concerns about economic slowdown are rising."

He continued, "From the perspective of our country, which is highly dependent on exports and imports, negative impacts such as the rise of protectionism are a concern, so sufficient preparation is necessary," and added, "In the financial market, uncertainties in exchange rates and interest rates may persist for a considerable period, so we believe a long-term approach is required."

The heads of research institutions attending the meeting also viewed the economic outlook pessimistically. The Korea Institute of Finance predicted that the domestic economic growth rate will slow from 2.6% this year to 1.7% next year, and the global rate will decrease from 3.2% to 2.7%. Park Jong-gyu, President of the Korea Institute of Finance, advised, "It is necessary to closely monitor the financial market in 2023 and examine the possibility of potential risks materializing."

In the insurance sector, concerns were raised about the slowdown in growth and an increase in loss ratios in the insurance industry next year due to the growing possibility of domestic and international economic recessions. Ahn Cheol-kyung, President of the Korea Insurance Research Institute, proposed, "A social consensus on pension reform and management of non-reimbursable medical items should be reached to establish a long-term growth foundation for the insurance industry."

Governor Lee stated, "We will reflect the opinions on potential risks presented at today's meeting in next year's financial supervisory work plan," and urged, "Please continue to provide advice from research institutions as needed."

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