On May 21, SK FSC held meeting to review flexibility re regulations.
SK FSC, SK FSS held a meeting with industry associations to check progress and discuss further plans for the temporarily eased financial regulatory measures.
Specifically, for extending the measures that are scheduled to expire end of Jun. 2024.
Meeting discussed that, based on current market conditions, financial firms should be able to maintain regulatory ratios even with termination of eased regulatory measures.
However, given the potential of growing uncertainties in the future, it was agreed that some of eased regulatory measures should be made available on an extended basis.
The LCR requirement for banks is scheduled to be raised by 2.5 percentage points every six months, while the authorities will need to review market conditions in the fourth quarter of 2024 to decide further plans from Jan. 2025 and thereafter.
Decided to extend the availability of eased measures for savings banks, see #151750.
As well as specialized credit finance businesses and financial investment companies, re real estate PF exposure ratio and postponing downsize of cap on bonds #192275.
In Q4 2024, SK FSC will consider the prudential market and liquidity conditions of the financial sector to decide whether to grant further extension of eased measures.
In Jun. 2024, SK FIA revised investment firms' internal control rules, see #214579.
In Jun. 2024, SK FSS proposed revisions re eased NCR risk weight, see #214763.
Nov. 2024 Normalization of Eased Regulations
On Nov. 29, 2024, SK FSC, SK FSS held a meeting to discuss plans for operating temporarily-eased regulations in the financial sector, set to expire at end-Dec. 2024.
The financial authorities will roll back the banking sector’s liquidity coverage ratio (LCR) requirement, currently standing at 97.5%, to 100% starting from Jan. 1, 2025.
For financial investment businesses, downsize the cap on the amount of bonds issued by specialized credit finance businesses that can be included when hedging risks associated with derivatives-linked securities (DLS) to 8%, starting from Jan. 1, 2025.
From Jan. to Jun. 2025, savings banks will be subject to a loan-to-deposit (LTD) ratio of 105%, down 5% from the current 110%; specialized credit finance businesses are subject to a KRW-based currency liquidity ratio of 95%, up 5% from the current 90%.
In H2 2025, authorities will decide on whether to extend the period or completely roll back eased regulations after reviewing market conditions, financial sectors' soundness.
Regulators
SK FSC; SK FSS
Entity Types
B/D; Bank; IB; Inv Co; MSB
Reference
Dec, Mt, PR, Trsl, 11/29/2024; PR 5/21/2024
Functions
Compliance; Financial; Market Conduct; Treasury
Countries
South Korea
Category
State
Products
Banking; Deposits; Fixed Income; Fund Mgt; Loan; Mortgage
