(LEAD) market volatility-financial sector
(LEAD) Market volatility has only limited impact on financial companies: regulator
(ATTN: ADDS more details on market stabilization measure in last 3 paras)
SEOUL, April 8 (Yonhap) -- Market volatility caused by the monthlong crisis in the Middle East has been delivering a limited impact on financial companies, the financial regulator said Wednesday, adding that it is still closely monitoring risk factors.
The Financial Services Commission (FSC) said it is checking liquidity levels and asset soundness of financial companies, while the Financial Supervisory Service (FSS) is conducting stress tests on the companies in various scenarios.
So far, volatility in the currency and bond markets has been posing a limited impact on the financial companies, but thorough preparations should be in store for more severe fallout from a drawn-out U.S.-Iran war, the FSC said.
Financial authorities have been stepping up efforts to prevent problems in shaky sectors from spilling over into the broader financial system, and prod financial firms to strengthen their asset quality and liquidity levels.
The FSC said in March alone, banks provided some 5 trillion won (US$3.38 billion) in new financing, while extending maturities for 4.7 trillion won worth of loans to the Middle East crisis-hit companies.
Earlier, major banks said they would provide more than 53 trillion won in new loans for the companies affected by the regional conflict, and also extend loan maturities and seek ways to reduce their financial burden.
In addition, some 2.4 trillion won worth of corporate bonds and commercial papers were purchased last month via market stabilization schemes, the FSC said, noting companies may face further difficulties in raising funds amid high market rates.
The yield on benchmark 3-year Treasurys stood at 3.451 percent on Tuesday, sharply up from 2.953 percent at the end of last month, and that on AA-rated, three-year corporate bonds rose to 4.107 percent from 3.476 percent over the cited period, according to the regulator.
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