S. Korea to assess risks of 6 financial groups

SEOUL, May 19 (Yonhap) -- South Korea plans to conduct a comprehensive assessment of six financial groups over their potential risk factors, the financial regulator said Tuesday.

The Financial Services Commission (FSC) said it will look into whether the poor performance of a group's affiliate can spill over to its financial affiliates.

The six business groups are Kyobo Group; Mirae Asset Financial Group; DB Group; financial affiliates of Hanwha Group; financial affiliates of Hyundai Motor Group and financial affiliates of Samsung Group.

The six business groups can carry out regular stress tests to assess their capabilities in dealing with a crisis, the commission said.

The commission also said the six business groups are required to make public their governance structure, financial health and other details on their websites and in regulatory filings in September.

The integrated regulatory filing is meant to provide a clear picture on a financial group's risk factors, according to the FSC.

In April, the International Monetary Fund said that South Korea's overall financial system appears resilient, but it warned of growing vulnerabilities.

The IMF said most parts of South Korea's banking system appear prudentially strong, but prospects for banks and insurers are dimming due to growth-related uncertainties, low interest rates, potentially disruptive financial technologies and adverse demographic shifts.

"Stress tests suggest that banks and insurers, in aggregate, can weather severe macro financial shocks, although some banks would make use of capital conservation buffers," the IMF said in a report on the Financial Sector Assessment Program posted on its website.

entropy@yna.co.kr
(END)