On March 25, the Financial Services Commission (FSC) held a meeting to assess the current state of domestic and global financial markets. Policymakers from the Financial Supervisory Service (FSS), Korea’s financial regulator, also attended the conference, which was the first official FSC event since newly-appointed chairman Shin Je-yoon took office three days ago.
Officials agreed that the global financial market has seen visible improvements recently, with the Dow Jones Industrial Average reaching an all-time high on March 20. Analysts are attributing the bull market to positive U.S. economic data and an expectation for another round of quantitative easing by the U.S. Federal Reserve. European stock markets, however, have further contracted, with the recent Cypriot crisis causing jitters across the euro zone. Korea’s stock exchange has also suffered a minor blow from the North Korean threat, but the impact hasn’t been as large as experts had predicted. The FSC said it hasn’t ruled out the significance of external risks such as political instability in Italy and the debt ceiling gridlock in the U.S.
The meeting also covered the recent cyber attack that crippled the operations of several Korean banks on March 20. The FSC has quickly moved to fix the technical side of the issue, and has initiated a probe into what may have caused the accident. So far, most financial transactions have returned to normal, and there are no indications that any personal data was stolen. The FSC is now repairing the remaining facilities, and has asked each bank to compensate consumers who had delayed transactions because of the system blackout.
Mr. Shin emphasized that the FSC should monitor potential signs of another cyber attack and strive to create a financial environment that citizens can rely on. He called on officials to thoroughly examine the security of Korea’s financial system, and solve any fundamental problems that may exist.
Mr. Shin further asked officials to keep close tabs on financial risk factors at home and abroad, and called for “bold measures” in case of real emergencies. He also said review meetings like this should be held regularly to facilitate communication among finance organizations.
Finally, Mr. Shin stressed that “robust finance” was the most important among key policy goals he proposed in his inaugural speech, which included creative finance, job creating finance, and people-oriented finance. He said close cooperation between the FSC and the FSS was crucial in achieving the new administration’s goals: propping up small and medium enterprises (SMEs), reducing household debts, and successfully launching the National Happiness Fund, a 1.5 trillion won (US$ 1.35 billion) budget aimed at helping low-income families restructure or repay their loans.
By Sojung Park