The Financial Supervisory Service said on the 12th that Lee Chan-jin, the FSS governor, attended the meeting of the Basel Committee on Banking Supervision (BCBS) top decision-making body in Basel, Switzerland, reviewed the implementation status of Basel III regulations, and discussed the direction of virtual asset regulation.
At this meeting, the main agenda items included the status of member countries' implementation of Basel III regulations, standards for managing virtual asset exposure, and ways to improve the assessment methodology for global systemically important banks (G-SIBs).
Participants positively noted that about 75% of member countries have already implemented Basel III regulations or plan to introduce them soon. In June 2020, Korea adopted credit risk regulations early, and in June 2023, it introduced the final regulations on market risk and operational risk, completing the establishment of the Basel III framework.
Participants noted that volatility in the global financial market has increased due to the COVID-19 pandemic and the Silicon Valley Bank (SVB) incident in the United States, and emphasized the importance of a sound global regulatory framework and a level regulatory playing field. Accordingly, they agreed that all member countries should fully and consistently implement Basel III regulations, and decided to continue monitoring and evaluating each country's implementation status through the BCBS.
In addition, in light of the recent growth of the virtual asset market and its potential impact on the financial system, they agreed to further review banks' prudential standards for virtual asset exposure and the methodology for assessing global systemically important banks.
Following the meeting, the governor also held a series of meetings with European financial supervisory authorities. On the 11th, the governor visited the European Central Bank (ECB) in Frankfurt, Germany, and met Christine Lagarde, the president, to exchange views on global financial market risks and the direction of regulation and supervision of digital assets.
The governor said that although volatility in the financial market is increasing due to recent geopolitical tensions in the Middle East, the Financial Supervisory Service, drawing on its crisis response experience, is making every effort to ensure financial market stability and the soundness of financial institutions. The governor also emphasized that protecting financial consumers and maintaining financial stability are the top priorities in the process of introducing supervisory regimes related to digital assets.
On the 10th, the governor met Petra Hielkema, the chair of the European Insurance and Occupational Pensions Authority (EIOPA), and discussed ways to strengthen supervision of insurance and pension providers, as well as responses to risks related to aging and climate change. The governor asked for cooperation to ensure that the assessment of reinsurance regulatory equivalence between Korea and the European Union (EU) can proceed smoothly.