Government Employees Pension Service Revamps Early Warning Indicators for Financial Risks... "Strengthening Risk Management"

The Government Employees Pension Service announced on June 2 that it has established and implemented an improved early warning indicator system for the financial market.

This improvement plan was prepared after a review by the Risk Management Committee at the end of April, with the aim of enhancing the precision of the early warning system so that it can respond sensitively to rapidly changing financial market conditions.

The enhanced early warning system has increased sensitivity to volatility by adjusting the threshold for the won-dollar exchange rate. In addition, the stock market monitoring indicators have been subdivided from the global index (MSCI ACWI) to the developed markets index (MSCI WI) and the emerging markets index (MSCI EM). The system has also newly introduced the bond MOVE index to reflect volatility in the bond market.

Joo Hyuntae, head of the Risk and Legal Affairs Office at the Government Employees Pension Service, stated, "In highly volatile markets, leading indicators such as early warning indicators are important." He added, "This improvement is a measure for swift response in times of complex crises, and we plan to continue upgrading the early warning system by closely analyzing market trends going forward."

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