Emergency Martial Law Situation: 10 Trillion Won Supplementary Fund Immediately Activated... "Concerns Over Increased Financial Market Volatility"

Amid the expansion of uncertainty in the financial market due to the emergency martial law situation, financial authorities have decided to immediately activate a stock market stabilization fund worth 10 trillion won. Additionally, a 40 trillion won bond market stabilization fund and a corporate bond and commercial paper (CP) purchase program will be launched for the bond and money markets.

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On the morning of the 4th at 8:40 AM, the Financial Services Commission (FSC) held a 'Financial Situation Review Meeting' chaired by Chairman Kim Byung-hwan, with the participation of the Financial Supervisory Service (FSS) head, heads of financial public institutions, related agency heads, and financial association leaders to assess the market situation and discuss future response tasks.

Chairman Kim stated, "The foreign exchange market and overseas Korean stock markets are gradually stabilizing," but added, "Since there is a risk of increased volatility in the financial market, we will take all possible measures together with policy financial institutions, related financial agencies, and financial associations to prevent the spread of financial market instability and ensure that the financial market operates normally and stably."

Earlier that day at 7 AM, an emergency macroeconomic and financial issue meeting (F4 meeting) chaired by Deputy Prime Minister and Minister of Strategy and Finance Choi Sang-mok decided to supply unlimited liquidity until the stock, bond, short-term money, and foreign currency money markets are fully normalized.

In response, Chairman Kim explained, "The stock market stabilization measures, including the 10 trillion won stock stabilization fund, will be prepared to be activated immediately at any time," and added, "For the bond and money markets, we will operate the 40 trillion won bond market stabilization fund and the corporate bond and CP purchase program to the fullest extent to maintain stability."

He also mentioned that they will closely monitor the foreign exchange soundness of financial companies and respond to margin call risks caused by exchange rate increases through foreign currency liquidity supply via securities finance.

Chairman Kim urged, "Policy financial institutions should actively and flexibly respond by mobilizing all available resources to ensure that there are no difficulties in funding for the underprivileged, small business owners, and companies," and emphasized, "Securities-related institutions such as the stock exchange should focus their capabilities on stabilizing investor sentiment and blocking market disorderly conduct such as stock price manipulation, disclosure violations, and market manipulation."

He requested each financial association to thoroughly check potential risks and actively encourage strengthening soundness and securing sufficient foreign currency liquidity.

Chairman Kim also said, "In a situation of high financial market volatility, even small accidents or incidents can amplify market anxiety, so please check internal control systems to prevent various financial accidents, hacking, information leaks, and other security incidents," and added, "The Financial Security Institute should conduct a comprehensive inspection of the IT security systems across all financial sectors to ensure there are no security blind spots in the financial system."

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