Financial Services Commission Chairman Lee Eog-weon said Thursday that Korea has "sufficient policy response capabilities" to handle financial market uncertainties stemming from Middle East instability, urging market participants to maintain confidence in the domestic economy rather than harbor excessive anxiety.
Korea Development Bank, Industrial Bank of Korea, and other state lenders will provide 13.3 trillion won ($9.7 billion) in financial support to small and mid-sized enterprises affected by the regional tensions.
"Despite uncertainties in the Middle East, Korea's economy and financial markets have solid fundamentals," Lee said at an emergency meeting held at the Government Complex Seoul before domestic markets opened. The meeting included officials from the Ministry of Economy and Finance, Financial Supervisory Service, Bank of Korea, and Korea Development Bank.
Participants agreed that stock prices and exchange rates could become more volatile depending on how the Middle East situation develops, potentially affecting the real economy. They pledged close coordination and vigilance in response.
"As economic and financial market stability is paramount, I ask related agencies to closely monitor market conditions through tight coordination," Lee said. "If necessary, actively implement market stabilization measures worth 100 trillion won-plus."
Lee warned of a crackdown on unfair trading practices that exploit market anxiety. "Unfair trading causes investor losses and seriously undermines capital market credibility," he said. "Thoroughly investigate all unfair practices including fake news distribution and market manipulation, and crack down on them with zero tolerance."
The 13.3 trillion won support program, jointly operated by Korea Development Bank, Industrial Bank of Korea, and Korea Credit Guarantee Fund, will provide funding and interest rate reductions to affected companies. A dedicated consultation center for affected businesses will also be established.
"While Korea's overall export exposure to the Middle East is not high, some vulnerable small and mid-sized companies have significant export dependence on the region," Lee said.
The FSC has activated a joint financial market monitoring task force led by Secretary General Shin Jin-chang, operating around the clock until markets stabilize.