Financial regulator proposes opening information-sharing channel to overseas markets
South Korea’s financial regulator on Thursday proposed opening an “information-sharing channel” with local financial institutions on overseas market conditions to better respond to offshore developments and minimize their impact on domestic markets.
Lee Bok-hyun, head of the Financial Supervisory Service (FSS), made the proposal during a meeting in Seoul with officials of financial holding groups, banks, brokerages and insurers handling global businesses.
“I propose building an information-sharing channel between the FSS and local financial firms on overseas financial markets,” Lee told the meeting.
In related move, Lee asked both sides to hold conference calls on a regulator basis to share up-to-date information and regulatory changes in overseas markets so as to “preemptively” respond to any contingencies.
Lee said current market sentiment has become so sensitive that any small development at home and abroad could turn into a major event that will swing the overall market directions.
He also urged those financial firms to ramp up risk management efforts related to the operation of their overseas offices that could stem from political and economic factors, saying the FSS will provide every possible support for their advance into offshore markets.
Market uncertainty has been mounting as central banks in major countries have ramped up rate hikes to combat inflation and worries are growing over the possibility of a global economic recession.
The debt market especially has seen rising uncertainty in the wake of a recent default on a municipal government-guaranteed debt linked to the Legoland theme park construction in the eastern province of Gangwon.