The financial district of Yeouido in Seoul. (Yonhap)
SEOUL, March 27 (Korea Bizwire) — South Korea’s financial regulator said Monday that local banks showed no signs of abnormality in their withdrawal and deposit operations.
The assessment by the Financial Supervisory Service (FSS) came amid concerns of a global banking crisis following the recent failures of two U.S. banks — Silicon Valley Bank and Signature Bank — and the stock plunge of Deutsche Bank, Germany’s largest bank.
Only a small number of customers with deposits exceeding 50 million won (US$38,400), the maximum amount of savings guaranteed by the South Korean government, transferred more than 50 million won, the FSS said.
The FSS said that internet-only banks have a low possibility of losing customer funds, as the average deposit amount per person is in the range of 2 million won.
It also said there is no possibility of a bank run in South Korea, noting 98.1 percent of depositors in domestic financial companies had less than 50 million won as of the end of September last year.
Also on Monday, the Financial Services Commission said it extended a set of temporary deregulation measures until June, which were originally set to expire between the end of March and the end of April, citing concerns of a global liquidity crunch.
One of the measures included in the extension is the easing of the loan-deposit ratio requirement on corporate loans, which is aimed at increasing liquidity in the financial markets.
Last October, South Korea raised the loan-to-deposit ratio ceiling for corporate loans to 105 percent for first-tier banks and 110 percent for savings banks, up from 100 percent.
(Yonhap)
