(LEAD) New FSC chief makes financial market stability top priority
(SMTA: ADDS FSC Chief’s comments in last 3 paragraphs)
SEOUL, July 11 (Yonhap) — The new head of South Korea’s top financial regulator said Monday he would give top priority to stabilizing the financial market amid concerns about heightened volatility caused by global monetary tightening and a possible economic recession.
Kim Joo-hyeon made the remark in an inaugural speech after taking office as head of the Financial Services Commission (FSC) on Monday. He was chosen for the post last month, but his nomination was delayed due to a parliamentary deadlock that delayed preparations for his confirmation hearing.
President Yoon Suk-yeol formally endorsed his nomination on Monday after the National Assembly failed to send a confirmation report on him as required by Friday’s deadline.
“I thought about what role our people want FSC to play right now,” he said. “First and foremost, it has to be about the stability of financial markets.”
Its inauguration came as financial markets were rocked by increased difficulties linked to monetary tightening in major countries to control inflation which could tip the world economy into a recession.
Local stock markets have suffered from high volatility recently, with the value of the local currency also plummeting against the US dollar.
“FSC has gained the experience of handling financial crises wisely many times before,” he said. “We will develop new sets of policies, including contingency plans, if necessary, for each situation we may consider.”
He also said that the FSC will cooperate with the Financial Monitoring Service, another financial watchdog, to ensure that funds are provided to areas in need in a timely manner to protect the financial system from excessive fluctuations.
Referring to rapidly rising borrowing costs and high inflation, the new FSC chief stressed the importance of helping small, low-income traders who may bear the brunt of tougher economic conditions more than others, pledging to provide them with the support they need to survive the challenges.
At a press conference held after his inauguration, Kim left open the possibility of a ban on short selling, saying it could be prosecuted, depending on the market situation.
Stock shorting refers to a trading technique in which investors sell stocks they have borrowed with the expectation that stock prices will fall in the near future.
Retail investors have called for a ban on short selling, saying it could worsen market declines, but supporters say it helps provide liquidity to the market.