Chairman Chin’s briefing

Excessive foreign-currency borrowing will be restricted.” Chin Dong-soo, the chairman of FSC  told on Friday, 25th September.

FSC Chairman Chin Dong-soo

 

 

 

 

 

 

 

Looking back what  happened after Lehman Brothers’ crisis, the foreign currency liquidity lacked with the high suspicion in the  foreign borrowing affordability of domestic banks , which ultimately impacted to the overall financial systemic risk.  Aligning with  Financial Stability Board, FSC decided to strengthen foreign borrowing policies for no more repeat  in the future.

 So, these are the points that have been currently being considered.

1) Revision on the Foreign liquidity ratio regulation 2) New Foreign liquidity Risk standards  3) Develop Foreign currency financial derivatives transaction risk standards 4) Strengthen the mid-term, long-term foreign currency loans funding ratio 5) Limit on the foreign asset 6) Reasonable foreign exchange hedge

Also monitoring for macroeconomic soundness will be tighten. Task Force, which are composed of relevant officers and banks and expertise, has been currently working on this issue. The plan will be announced within October.

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About FSC Korea
The Financial Services Commission has been established for the purpose of protecting the integration of Korea’s financial markets by promoting sound credit system and fair business practices. To this end, the FSC serves as a consolidated policy making body for all matters pertaining to supervision of the financial industry as a whole. To raise the efficiency, the posts of the FSC Chairman and the FSS Governor were separated on March 2008 for clear distinction between policy-making and execution of financial market supervision

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