Lee Bok-hyun "US Credit Rating Downgrade... Urges Stable Management of Foreign Currency Liquidity"

FSS Executive Meeting

Lee Bok-hyun, the Governor of the Financial Supervisory Service, stated on the 20th regarding the US credit rating downgrade, "The market impact is more limited compared to the past, but we must not let our guard down," and instructed to "closely monitor changes in the flow of global investors' funds and the domestic impact."

At the FSS executive meeting held that day, Governor Lee said, "The 'credit rating downgrade' incident occurred amid growing concerns about an economic recession due to the uncertainty of US tariff policies and declining policy credibility," diagnosing that "it could serve as a catalyst for weakening the status of US Treasury bonds and the US dollar as safe assets in the long term."

He further stated, "We must ensure financial stability by managing foreign exchange risks and foreign currency liquidity stably, based on close cooperation centered on the Macroeconomic and Financial Issues Meeting (F4)."

Additionally, he instructed to promote effective competition within the financial industry and establish a sound market order. This is due to the potential for competition restrictions arising from the oligopolistic structure of some financial infrastructures and information exchange activities among some financial companies.

Governor Lee emphasized, "Due to the nature of the financial industry, necessary financial stability measures can trigger competition restriction controversies, and conversely, competition promotion measures can infringe on financial stability and consumer rights, so it is important to maintain an appropriate balance between financial stability and competition promotion while pursuing comprehensive consumer welfare expansion."

Recently, the Fair Trade Commission has initiated sanction procedures related to the collusion allegations of the four major banks' Loan-to-Value (LTV) ratios and the collusion allegations of banks and securities firms regarding government bonds.

He also urged, "Do your best to establish a sound competitive order within the financial industry by promoting healthy competition in the financial sector, resolving information asymmetry between financial companies and consumers, and strengthening the cooperation system between financial authorities and competition authorities."

Jin Young-ki, Hankyung.com reporter young71@hankyung.com