Financial authorities have decided to closely monitor the financial market situation and implement 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, 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 emphasized the importance of solid financial market stability in his opening remarks, diagnosing the conditions of domestic and international financial markets. He noted 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 pointed out 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 stressed 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 solid fundamentals. He also stated that potential risk factors such as household debt, real estate PF, and the soundness of the secondary financial sector are being managed stably. He added that the FSC would closely monitor the market situation in cooperation with related agencies and take bold and preemptive market stabilization measures if necessary.
Participants shared their views on the outlook for the domestic and international economy and financial markets for next year. They predicted that the domestic economy would grow at a rate of around 1% in the late 1% range, driven by strong exports and a recovery in domestic demand. They also expected the financial market to remain stable, considering the good 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 risk factors, including the possibility of differentiated monetary policies among major countries, concerns about global AI overheating, and long-term bond yield increases due to concerns about fiscal soundness in major countries.