Lee Bok-hyun, the head of the Financial Supervisory Service (FSS), met with the three major Japanese banks and holding companies (MUFG, SMBC, and Mizuho) and public pension funds. During the meeting, he emphasized that the volatility in the Korean market resulting from the Dec. 3 martial law is temporary.
According to the FSS on the 17th, Lee visited Japan the previous day and met with the CEO of MUFG, the president of SMBC, the president of Mizuho, and the chief investment officer of the Government Pension Investment Fund (GPIF) for high-level discussions.
Lee explained that while President Yoon Suk-yeol declared martial law, the domestic financial market is stabilizing rapidly. He also noted that the government is actively responding to downward economic risks through synergy between fiscal, currency, industrial, and financial policies.
Lee said, “The Korean economy and financial markets are functioning normally,” adding, “It is not a situation to worry about the deterioration of the investment environment for Japanese financial companies operating in Korea.” He urged continued support from the headquarters of Japanese financial institutions for their operations in Korea.
In addition, Lee discussed risk factors related to the direction of currency and economic policies of major countries, such as the United States and Japan, with them. This discussion stems from issues arising from the deepening of protectionism and the slowdown of China’s growth, as well as the downward risks in the physical economy of East Asia as the Trump administration is set to commence next year.
The FSS stated that changes in the monetary policy stance of major countries could have unexpected effects on the financial industry, and it sees significant uncertainties in the global economy for the coming year. In particular, it assesses that the Bank of Japan's interest rate policy is a key variable affecting not only Japanese financial institutions but also the global financial industry, including Korea.
Lee also shared updates on the advancement of the Korean capital market. He explained that major corporations are participating in value-up programs, suggesting the system will soon be established in the market. As of the 13th of this month, 92 corporations have announced plans to enhance their corporate value, accounting for 34.1% of the total market capitalization.
Lee elaborated to the Japanese side that the guidelines for the stewardship code are being revised, and mechanisms for market oversight, such as listing system improvements, are being strengthened. He requested ongoing interest in Korea, as initiatives to protect shareholder interests and enhance share buybacks are also being pursued in various ways.
Lee met with the chief financial officer (CFO) of TSI Holdings, one of Japan's excellent value-up companies, and listened to actual case studies. He determined that companies must voluntarily and sincerely communicate with investors, and efforts must be based on contemplating management strategies and shareholder return policies from the investor's viewpoint.