Bank of Korea: “We will give greater weight to interest rates and domestic conditions.” Financial Services Commission: “We need solidarity for the common people and other vulnerable groups.” Financial Supervisory Service: “We will solidify the principle of self-responsibility for insolvent companies.”
The topic of the New Year’s address of the ‘F3’ (Bank of Korea Governor Lee Chang-yong, Financial Services Commission Chairman Kim Joo-hyun, and Financial Supervisory Service Chairman Lee Bok-hyun), who are responsible for financial and monetary policy, focused on stabilizing three things: inflation, debt, and real estate project financing (PF). The three heads predicted that the economy would gradually recover by seeking stability despite uncertainties inside and outside of this year. ▲ Explanation of the inspection of the operation status of the price stability target in the second half of 2023.
Lee Chang-yong, Governor of the Bank of Korea, is making remarks at the ‘Introduction session to inspect the operation status of the price stability target for the second half of 2023’ held at the Bank of Korea in Jung-gu, Seoul on the afternoon of the 20th. 2023.12.20. Joint Reporter Lee Chang-yong, Governor of the Bank of Korea, said on the 1st, “This year, the Bank of Korea must pursue price stability as a top priority while finding the optimal and sophisticated policy combination necessary for economic recovery and financial stability.” “It is important to finish,” he emphasized.
Governor Lee predicted that the slowdown in global inflation will continue amid weakening global growth. However, given that the semiconductor industry is reviving, he believes that an export-centered economic recovery will occur.
He said, “With the interest rate hikes in major countries coming to an end this year, it is expected that policies will be differentiated by country,” adding, “There is more room to determine policies with greater weight given to our internal conditions.” At the same time, he emphasized, “The slowdown in inflation may be slower than expected due to the influence of uncertainty in raw material price trends and accumulated pressure to increase costs,” but added, “We must achieve price stability and we will do so.”
He also mentioned ‘household debt’ and ‘real estate PF’ issues several times, emphasizing the need to thoroughly prepare for financial instability. Governor Lee said, “Signs of commercial real estate loans becoming non-performing are appearing in major developed countries, and some risk signals are being detected in Korea as well, centering on real estate PF.” He added, “What are the structural causes and institutional supplementary measures for past real estate price surges and PF insolvency? “We need to carefully examine whether the current regulatory and supervisory system in response to bank runs in the digital era is sufficient in the future,” he said. ▲ Financial Services Commission Chairman Kim Joo-hyun (right) and Financial Supervisory Service Chairman Lee Bok-hyun announced a temporary ban on short selling at the Seoul Government Complex on the 5th of last month. We are briefing on this. Yonhap News Agency Financial Services Commission Chairman Kim Joo-hyun also announced that he would focus on issues related to the soundness of real estate PF and secondary financial institutions and stabilization of household debt. Chairman Kim said, “Even if the interest rate falls, it is still a burden for many households and businesses, and the economic recovery is also centered on exports, so the profits of the self-employed and small business owners who depend on domestic demand are likely to stagnate,” adding, “Amid income and asset imbalance and political polarization, “In order to overcome difficulties, it is important to maintain social solidarity to prevent vulnerable groups such as ordinary people from collapsing,” he emphasized.
Lee Bok-hyeon, head of the Financial Supervisory Service, presented two goals: ‘stability of the financial market’ and ‘efficient distribution of resources’ and announced that he would apply the principle of self-responsibility to insolvent companies and carry out orderly restructuring. Director Lee said, “In order to prevent the transfer and spread of financial market risks, we will reform the contingency plan (emergency plan) and do our best to prevent systemic risks,” and added, “We will secure crisis response capabilities by improving the loss absorption capacity of financial companies.” “He said.
Reporter Shin Yung-ah
2024-01-01 06:34:54
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