Finance Minister Koo Yun cheol assured the public on Thursday that financial resilience remains robust despite ongoing market volatility. He spoke during a macroeconomic policy meeting in Seoul. The meeting included Bank of Korea Governor Shin Hyun song and the heads of the Financial Services Commission and Financial Supervisory Service. Koo acknowledged that government bond yields and the won dollar exchange rate continue fluctuating. The prolonged conflict in the Middle East drives much of this instability.
Stress tests simulated crisis scenarios involving key variables such as oil prices and exchange rates. Financial institutions demonstrated sufficient capacity to respond even under extreme conditions. The authorities will maintain around the clock monitoring of financial and foreign exchange markets. They will also take stabilization measures in a timely manner if necessary.
South Korean banks and financial firms have strengthened their balance sheets since the global financial crisis. The current stress tests incorporated worst case assumptions about energy costs and currency swings. Koo did not specify what stabilization measures authorities might deploy. Options could include market interventions or liquidity support.
The Middle East conflict has disrupted global energy supplies and trade routes. Oil prices have climbed steeply. South Korea imports most of its crude oil. The won has weakened against the dollar in recent weeks, adding to import pressures.
The meeting participants agreed to coordinate closely on any future policy actions. The Financial Services Commission and Financial Supervisory Service will share data regularly with the central bank. Koo reiterated that the government’s top priority is safeguarding the economy from external shocks. He called for all financial institutions to remain prudent in risk management. The finance ministry will release more details of the stress test results next month.
