Policy briefing draws 22 global banks, asset managers
Uncertainty lingers despite Korean market's rapid growth
Lee Chan-jin, governor of the Financial Supervisory Service, visited London for the first time since taking office to brief global investors on South Korea's capital market and policy direction. The trip aimed to deepen investors' understanding of the Korean market while boosting its competitiveness by improving market trust, financing conditions for innovative companies and the investment environment for foreign investors.
The FSS said Thursday that Lee traveled to London from Sunday to Thursday to attend an overseas investor relations event co-hosted by the FSS, local governments and the financial industry, and to meet with senior officials from the UK's financial regulators.
The investor relations event, held Tuesday, drew senior executives from 22 global investment banks and asset managers, including Goldman Sachs, Morgan Stanley, Insight Investment and PIMCO. The event took the form of a small-scale roundtable centered on major global financial firms. It also included a question-and-answer session on the state of the Korean stock market and the long-term investment environment.
At the event, Lee said South Korea's stock market had grown rapidly in recent years but noted that uncertainties remain, including market volatility and geopolitical risks. He said the Kospi rose 62 percent from January through the end of August this year. That outpaced Japan's Nikkei, up 32 percent, the US S&P, up 12 percent, and Germany's DAX, up 7 percent. South Korea's stock market also climbed from 13th to within the top seven in global market capitalization rankings.
He then stressed the importance of creating a market environment investors can trust with their money. "We will create an environment where investors can confidently invest in Korea's capital market and companies," Lee said. He added that fair market order and investor confidence in companies' efforts to boost shareholder returns must underpin this. Financial regulators plan to step up their response to unfair trading practices, encourage undervalued companies to voluntarily enhance their value, and push forward improvements to corporate governance at financial firms.
Lee also outlined measures to expand financing options for innovative companies. The plan includes overhauling Kosdaq's listing and delisting criteria, segmenting the market according to company characteristics, and encouraging major investment banks to supply more venture capital. It also calls for easing capital regulations on financial firms so that funds flow into productive sectors such as advanced technology and industry.
To improve market access for foreign investors, the FSS will also pursue a shorter settlement cycle, extended trading hours and the buildout of STO infrastructure. "By building an infrastructure that allows foreigners to trade the won without restrictions on time or place, we will ensure that abundant funds from global investors flow into the Korean market," Lee said. He added that the goal is for "Korea's capital market to leap forward into a premium market and for Korea to become reborn as a global financial hub."
Investors in London gave positive reviews to efforts to boost corporate value through revisions to the Commercial Act. They also welcomed steps to improve market access, such as the abolition of the foreign investor registration system. However, some also said that translating these changes into a genuine strengthening of capital market competitiveness would require consistent policy execution. They added that the new systems must also become firmly established.
During his stay in London, Lee also discussed key supervisory issues with British financial regulators. With the Financial Conduct Authority, he discussed financial consumer protection and a compensation scheme for voice phishing victims. With the Prudential Regulation Authority, he discussed digital operational risk and supervisory approaches to virtual assets and stablecoins. He also shared plans to strengthen accounting fraud responses and audit oversight with the Financial Reporting Council.
Lee has recently called for close monitoring of market risk factors. At a consumer risk response council meeting Friday, he stressed the need to keep close watch on sector-specific risks. He also called for immediate action whenever there are concerns about consumer harm.
rim@heraldcorp.com
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