Financial authorities have decided to closely monitor the financial market situation and take preemptive market stabilization measures if necessary. On the 15th, the Financial Services Commission (FSC) held a financial market situation review meeting chaired by Chairman Lee Eok-won, along with the Financial Supervisory Service, the Korea Institute of Finance, the Korea Development Institute (KDI), and macroeconomic and financial market experts to evaluate this year’s domestic and international economic and financial markets and discuss future prospects and risk factors.
Chairman Lee Eok-won diagnosed the domestic and international financial market conditions and emphasized the importance of solid financial market stability. He assessed that while financial market instability expanded in the first half of the year due to the Trump administration’s tariffs and domestic political uncertainties, the economy and stock market showed a recovery trend in the second half thanks to the new government’s policy efforts and improved corporate performance. However, he noted that vigilance over the domestic financial market has increased due to the recent rise in government bond yields and increased volatility in the foreign exchange market.
Chairman Lee emphasized that the Korean economy has sufficient crisis response capabilities, citing the soundness of financial institutions, the world’s 9th largest foreign exchange reserves, and low CDS premiums. He also mentioned that structural issues such as household debt, real estate PF, and the soundness of the secondary financial sector are being managed stably. He added that the FSC will closely monitor the market situation in cooperation with related institutions and take bold and preemptive market stabilization measures if necessary.
Meeting participants shared their views on the outlook for the domestic and international economic and financial markets for next year. They projected that the Korean economy would grow at a rate of around 1% in the late range, driven by strong exports and domestic demand recovery. However, they identified various potential risk factors, including the possibility of differentiated monetary policies among major countries, concerns about global AI overheating, and worries about the fiscal soundness of major countries. Participants emphasized the need for the government’s active role in ensuring financial market stability and agreed to extend the market stabilization program next year.