Emergency stock market review held with regulators and market experts
FSC Chairman Lee urges restraint on credit lending, stronger risk management
The Financial Services Commission held an emergency stock market review meeting Thursday, chaired by FSC Chairman Lee Eok-won and attended by officials from the Financial Supervisory Service, Korea Exchange and other related agencies, as well as market experts. Financial authorities called on the financial investment industry to refrain from indiscriminate credit lending and to strengthen risk management.
The meeting was attended by the deputy governor of the Financial Supervisory Service, the vice chairman of Korea Exchange, the president of Korea Securities Depository, the vice president of Korea Securities Finance, the deputy director of the International Finance Center, the deputy director of the Korea Capital Market Institute, the head of the securities and futures division at the Korea Financial Investment Association, and the heads of research centers at KB Securities and Shinyoung Securities.
Participants assessed that expectations of global interest rate hikes, uncertainty over investment and earnings prospects in the AI semiconductor sector, and rising international oil prices had all contributed to heightened volatility in the domestic stock market. They also noted that, given the solid fundamentals of the South Korean economy, the recent decline in share prices and shifts in supply and demand appeared excessive.
The FSC said market participants should remain alert to expanding volatility while guarding against the spread of excessive anxiety and sharp herding behavior, and urged investors to make rational investment decisions by considering companies' intrinsic value and medium- to long-term growth potential. Participants reached a consensus on the same points, echoing the call for investors to weigh fundamental corporate value and long-term prospects before making investment decisions.
Financial authorities and related agencies said they would closely monitor domestic and international market trends and investor flows, and would take a zero-tolerance approach to market-disrupting activities such as the spread of false rumors, market price manipulation and illegal short selling. They also said they would make advance preparations to swiftly activate contingency plans should market conditions deteriorate further.
"Please remain vigilant even at small signs of volatility and respond actively to ensure financial market stability and investor protection," Lee said.
He added that investment relying on excessive debt and credit was dangerous, and that risk management was especially important at times like these. "Financial firms should refrain from indiscriminate credit lending and spare no effort in protecting customers and managing risk," he said.
moon@heraldcorp.com
