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(LEAD) Regulators urge leaders of major financial firms to seek market stability, responsible management

Economy 10:23 March 31, 2023

(ATTN: ADDS financial leaders' comments in last 3 paras)

SEOUL, March 31 (Yonhap) -- The heads of South Korea's financial authorities on Friday asked leaders of financial holding companies to strive for financial market stability and exercise responsible management to restore trust in the financial system.

Kim Joo-hyeon, head of the Financial Services Commission (FSC), and Lee Bok-hyun, chief of the Financial Supervisory Service (FSS), made the call during a meeting in Seoul with the chairmen of the country's five largest financial holding companies.

"The failure of major overseas banks seems to have had a limited impact on the Korean financial market, but we cannot slow down our efforts to stabilize the market in preparation for domestic and international uncertainties," Kim said.

"In the face of high interest rates, I urge you to pay attention to support programs for vulnerable borrowers … and to help the financial sector absorb rising costs, such as interest rate increases, as much as possible so that the rate hike passed on to borrowers is minimized," he added.

He also emphasized the importance of internal control and risk management capabilities, which have been highlighted by global banking problems, and asked the financial industry to work hard for responsible management.

FSS chief Lee asked them to strengthen their crisis response systems amid worries over rising financial market volatility.

"As volatility in the domestic and international financial markets may expand, and risks in real estate project financing (PF) remain severe, we urge holding companies to solidify their own crisis response systems by expanding their loss absorption capacity," he said.

The leaders of financial holding firms recognized the importance of fulfilling their social responsibility and overhauling organizational systems.

"We will fulfill our social responsibilities at a time when the role of finance is more important than ever," Shinhan Financial Group Chairman Jin Ok-dong said.

Woori Financial Group Chairman Yim Jong-yong said, "We will make continuous efforts, not just one-off attempts, to overhaul our organizational system and prepare the best package to realize win-win finance."

FSC chief Kim Joo-hyeon (2nd from R) speaks at a meeting with the leaders of major financial holding firms in Seoul on March 31, 2023. (Yonhap)

FSC chief Kim Joo-hyeon (2nd from R) speaks at a meeting with the leaders of major financial holding firms in Seoul on March 31, 2023. (Yonhap)


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