Lee Bok-hyun, Financial Supervisory Service Chief, Urges Strengthening Daily Monitoring System for Short-term Fund Market Trends

Guidance on Strengthening Capital Adequacy of Financial Companies
Supervision of High-Interest Rate Fundraising Competition

Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), on the 5th ordered a swift response regarding the significant fluctuations in the domestic financial market caused by prolonged U.S. monetary tightening, rising government bond yields, and sustained high oil prices. He instructed to strengthen the daily monitoring system of short-term fund market trends and to guide financial companies to enhance their capital capacity.

[Image source=Yonhap News]

After observing large volatility in the domestic financial market even after the Chuseok holiday, Governor Lee convened an executive meeting that morning and said, "Please also strengthen the daily monitoring system regarding supply and demand trends in the domestic fund market, interest rate spreads, maturing amounts and refinancing rates, issuance conditions by credit rating for project financing (PF) - asset-backed commercial paper (ABCP), and short-term fund market trends such as negotiable certificates of deposit (CD) and repurchase agreements (RP)."

The FSS announced that it plans to cooperate with related agencies to enable prompt policy responses through existing market stabilization measures such as corporate bond and commercial paper (CP) purchase programs and the Bond Market Stabilization Fund (BMSF), if necessary.

Along with this, he also urged a re-examination of financial companies' fund supply and demand plans, based on the judgment that there is a possibility of money movement due to the concentration of regular deposit maturities at the end of the year. Governor Lee said, "Although liquidity risk has been considerably improved through prior liquidity securing and maturity dispersion inducement, fund supply and demand plans must be re-examined through stress tests assuming severe crisis situations." He also instructed supervision to prevent high-interest fund raising for asset competition purposes.

He emphasized re-examining the operability of foreign currency credit lines and monitoring conditions for foreign currency procurement. He also ordered strengthened market surveillance to prevent acts that disrupt market order by exploiting financial market instability.

Governor Lee repeatedly emphasized to the relevant departments, "Please approach your work with special vigilance so that you can respond swiftly to even the slightest signs of abnormalities."

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