▲ Kim Joo-hyeon (R), head of the Financial Services Commission (FSC), speaks during a meeting with the heads of policy financing organizations, including the Export-Import Bank of Korea, at the government complex in Seoul on Aug. 2, 2022. (Yonhap)

FSC chief-financial markets

FSC chief vows 'preemptive' action against financial market volatility

SEOUL, Oct. 6 (Yonhap) -- South Korea's financial regulator will keep a close eye on financial market situations and respond in a "preemptive" manner as volatility is rising amid global monetary tightening and worries over an economic slowdown, its chief said Thursday.

Kim Joo-hyeon, chairman of the Financial Services Commission (FSC), also vowed continued efforts to engineer a "soft landing" in the country's ballooning household debt in a way that it would not cause strain to the overall economy.

"Financial market volatility has been expanding with global inflation woes persisting, major countries accelerating tightening and the Russia-Ukraine war dragging on," Kim told lawmakers during a parliamentary audit into the commission. "Going forward, we will respond in a preemptive manner while monitoring market situations."

South Korea's financial markets have been buffeted recently with stocks and local currency losing significant ground on investor anxiety that aggressive monetary tightening in the United States and other major economies could tip the global economy into a recession.

Kim said that the FSC has stepped up market monitoring and taken measures deemed to be necessary for market stabilization, including support for purchase of corporate bonds and commercial paper.

Voicing concerns over household debt, he vowed to continue efforts to secure a soft landing in resolving the potential risk to the financial market and the broader economy.

"In a way that the household debt that has grown fast in the process of dealing with the pandemic would not cause a strain to our economy, we will continue to make efforts to engineer a soft landing," he said.

"In addition, we will beef up our soundness guidance on financial firms in order to prevent the possibility of household debt default leading to those firms going bad," he added.

The FSC chief also promised to intensify efforts to protect ordinary investors' rights in line with global standards, which he said would help the country's capital market play a role of supporting sustainable growth of the domestic economy.

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