FSS Governor Reassures Global Analysts Amid Political Instability

Lee Bok-hyun, the governor of the Financial Supervisory Service (FSS), recently convened a meeting with global investment bank (IB) analysts to address concerns about South Korea's economic stability in the face of recent political turbulence. The meeting, which included representatives from major financial institutions such as Morgan Stanley, UBS, and JP Morgan, aimed to reassure foreign investors and discuss the future of South Korea's economic policies.

The backdrop to this meeting is the recent declaration of martial law in South Korea, which has led to significant political uncertainty. This development has made global IB analysts skeptical about the stability of the South Korean market. In response, a government-wide task force (TF) has been established to monitor key economic indicators such as consumption, investment, exports, employment, and prices.

During the meeting, global IB analysts expressed their worries that political uncertainty could exacerbate the expected slowdown in South Korea's economic growth rate next year, thereby increasing downside risks. They inquired about the continuous pursuit of capital market advancement measures, including the abolition of the financial investment income tax and amendments to the Commercial Act and the Capital Markets Act.

Lee responded by emphasizing the consistent implementation of these capital market advancement measures. He stated, "Economic issues are separate from political issues, and we will actively respond to downside risks through synergy from the appropriate combination of fiscal, monetary, industrial, and financial policies." He appealed for trust in South Korea's economic fundamentals, asserting that the government would take active measures to mitigate any negative impacts arising from the current political situation.