SEOUL, Jan. 7 (Korea Bizwire) - South Korea’s top financial regulator on Thursday stressed the need for careful risk management to maintain financial stability in the face of resurfacing geopolitical risks and external uncertainties.
Financial Services Commission (FSC) Chairman Yim Jong-yong made the remarks at a meeting held with officials from relevant government agencies and experts to check economic and financial risk factors and to explore ways to cope with them.
“Risk management for financial stability has become more important this year than any other time in light of economic uncertainties at home and abroad and North Korea’s nuclear risks,” Yim said.
While noting that issues on North Korea “have limited impact on our financial market, and yesterday was no exception,” he stressed that it is “crucial to preemptively deal with changing circumstances with a sense of great awareness.”
“As North Korea claimed it successfully tested a hydrogen bomb, the nature of the North’s nuclear issue would be changed in a fundamental fashion,” Yim said, pointing to the communist country’s detonation test a day earlier in the latest provocative move.’
The chief also called for flexible and swift responses to global uncertainties such as China’s slowdown and uncertain circumstances in the Middle East by pushing for structural reform and strengthening the nation’s economic fundamentals.
“The government will expedite the restructuring of companies found to be insolvent, and will continue to carry out inspections in a regular manner,” Yim said.
Last year, the Financial Supervisory Service (FSS) put a total of 54 large-sized firms showing signs of going bust on the debt restructuring list, forcing them to go through a debt workout program or to file for court receivership for liquidation.
In a separate meeting with experts to assess the overall economic circumstances for the new year’s policy direction, FSS head Zhin Woong-seob pledged to ensure that a new paradigm for financial supervision will take root.
“We will strive to settle a voluntary and innovative inspection system this year, while tightening the grip on financial institutions,” Zhin said in his opening remarks.
Vowing to revamp unfair practices in the financial sector to better protect customers, the chief also stressed the need “to detect both internal and external risk factors in advance.”