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 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 while financial market instability increased in the first half of the year due to the Trump administration’s tariffs and domestic political uncertainties, overall stability was maintained in the second half. However, he pointed out that vigilance is increasing due to the recent rise in government bond yields and increased volatility in the foreign exchange market.
Chairman Lee stressed that the economy’s crisis response capability is sufficient, citing the soundness of financial institutions, the world’s 9th largest foreign exchange reserves, and low CDS premiums. He added that structural issues such as household debt, real estate PF, and the soundness of the secondary financial sector are also being managed stably. He also mentioned that the FSC will closely monitor market conditions in cooperation with related institutions and take bold and preemptive market stabilization measures if necessary.
Participants shared their views on the outlook for the domestic and international economic and financial markets next year. They predicted that the domestic economy would grow at a rate of around 1% in the late stages, driven by strong exports and a recovery in domestic demand. Considering the good performance of domestic companies, government efforts to revitalize the capital market, and the soundness and loss absorption capacity of financial institutions, the likelihood of severe financial instability such as credit crunches is expected to be significantly lower. However, they diagnosed that various risk factors, such as the possibility of differentiated monetary policies among major countries, global AI overheating concerns, and the potential for geopolitical risks to re-expand, are latent.