SEOUL– South Korea needs to keep close tabs on financial market situations with a “sense of crisis” that many potential risks facing the country could turn into reality at any time, top financial regulators said Wednesday.

Kim So-young, vice chairperson of the Financial Services Commission (FSC), made the remark as he presided over his first market-monitoring meeting with officials from relevant organizations, including the Financial Supervisory Service and the Korea Deposit Insurance Corp., a day after taking office.

“With financial situations going through steep changes, we need to carry out our tasks with a special sense of crisis that potential risks underlying in our financial markets and systems could become real at any time,” Kim said.

“We will intensify our financial market monitoring so as to react timely, while closely monitoring potential risks for financial firms and also such risks related to households and businesses,” he added.

Jeong Eun-bo, head of the Financial Supervisory Service (FSS), also underlined the need for “thorough risk management,” citing heightened uncertainty stemming from major economies’ push to raise interest rates to tame inflation.

“Uncertainty has been on the rise for economic and financial conditions as central banks have entered into a cycle of intensified tightening (of monetary policy) in the face of strong inflation pressure,” he told a meeting with market experts in Seoul.

“Though our economy remains relatively stable, we should carry out thorough crisis management in case such external variables turn into a crisis,” he said.

The meetings came as South Korea’s financial markets have seen increased volatility recently amid worries over the impact that high inflation and monetary tightening by advanced nations could have on economic growth.

Adding to the woes are the protracted supply chain disruptions due to the ongoing war in Ukraine and COVID-19 lockdowns in major cities in China.

Source: Yonhap News Agency