Financial Supervisory Service Governor Lee Chan-jin called for stronger monitoring of margin trading and leveraged products and for investor protection as volatility in domestic and overseas financial markets has widened sharply following the Middle East situation.
On the 10th, Lee held a video executive meeting with the Financial Supervisory Service headquarters from Basel, Switzerland, saying there is a possibility that financial market uncertainty stemming from the Middle East situation could persist for a considerable period, and asking the in-house Middle East emergency response task force (TF) to make all-out efforts for market stability and the soundness of financial companies. Lee has been in Switzerland since the previous day to attend a high-level meeting of the Basel Committee on Banking Supervision.
Lee also asked for stronger guidance on the risks of credit transactions, including the possibility of forced liquidation, so that investors are not exposed to excessive risk in a volatile market, and for supervision to ensure the securities industry does not neglect risk management and investor protection.
He also noted the need to monitor the investment status of individual investors in leveraged exchange-traded funds (ETFs).
In addition, he called for intensive inspections of unfair trading practices such as spreading false information and front-running in paid chat rooms using stock influencers' YouTube channels and social media (SNS), and emphasized swift investigations and stern action when violations occur.
Lee said, in response to heightened market volatility, thoroughly examine potential risk factors by financial sector, and monitor the industry-specific impact of rising oil prices and exchange rates, as well as corporate liquidity and funding conditions.
The Financial Supervisory Service (FSS) decided to operate a 24-hour emergency response system until the Middle East situation stabilizes. Through this, it will closely examine domestic and overseas financial markets and, if necessary, cooperate with relevant agencies to implement market stabilization measures in a timely manner.