Financial authorities have decided to closely monitor the financial market situation and take preemptive measures to stabilize the market if necessary. On the 15th, the Financial Services Commission (FSC) held a financial market situation review meeting chaired by Chairman Lee Eok-won, with the Financial Supervisory Service, Korea Institute of Finance, 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 in the first half of the year, financial market instability expanded due to the Trump administration’s tariffs and domestic political uncertainties, but in the second half, the economy and stock market showed a recovery trend thanks to the new government’s policy efforts and improvements in corporate performance, especially in the semiconductor sector. However, he noted that there is growing caution due to the recent rise in government bond yields and increased volatility in the foreign exchange market.
Chairman Lee emphasized that the country’s crisis response capability is sufficient, citing the soundness of financial institutions, the world’s 9th largest foreign exchange reserves, and low CDS premiums as factors that provide enough resilience and policy capability to respond to various internal and external uncertainties. He also explained that structural issues such as household debt, real estate PF, and the soundness of the secondary financial sector are being managed stably.
Participants shared their views on the outlook for the domestic and international economy and financial markets for next year. They projected that the domestic economy would grow at a rate in the high 1% range, driven by strong exports and a recovery in domestic demand. They also expected that the financial market would remain stable, considering the favorable performance of domestic companies, the government’s efforts to revitalize the capital market, and the soundness and loss absorption capacity of financial institutions. 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.