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| Financial Services Commission (FSC) Chairman Kim Joo-hyun speaks during a session of the National Assembly on April 4. Yonhap |
By Anna J. Park
Korea's top financial regulator has vowed to respond strictly to vicious market rumors intended to cause turbulence in financial markets.
Financial Services Commission (FSC) Chairman Kim Joo-hyun stressed Friday that the top financial authority will counter any attempts to cause disruptions by spreading malicious or groundless rumors.
"With various concerning factors existing in the global finance, the maliciously spread of groundless rumors could cause jitters in financial markets and afflict great damage to the economy by harming financial companies' capital soundness," the FSC chief said during a staff meeting on Friday.
Kim ordered the financial regulator to respond sternly to those who fabricate such market rumors by cooperating with prosecutors and the police.
The FSC's move follows a malicious faulty rumor circulated recently in the local financial market. The rumor urged people to withdraw all their deposits from OK Savings Bank and Welcome Savings Bank, insisting that the banks would soon suspend payments to depositors, due to a major loss incurred at the banks from failed real estate project financing.
The two savings banks hit back that the rumor is entirely groundless, immediately taking legal action against the rumor spreaders. The Financial Supervisory Service (FSS), a state-run financial watchdog agency, also helped set the record straight, stressing that the two lenders' capital adequacy ratio far exceeds the globally recommended level by the Bank for International Settlements (BIS).
The FSC chairman also called on officials of the top financial regulator to be extra cautious in managing policy messages.
"If some policy ideas that haven't yet been fully discussed or examined are to be exposed to the public, it could potentially cause confusion in financial markets, or lower the efficacy of financial policies," he said.
