Korea’s financial markets can expect more volatility as global risks persist, but chances of the gyrations hitting excessive levels are not high, the top financial regulator said Tuesday.

“The latest spurt of volatility in local markets was to a degree unavoidable, as it stemmed from external factors. But according to experts, Korea is unlikely to see the volatility spike to an excessive level,” Yim Jong-yong, chief of the Financial Services Commission said in a meeting in Seoul.

Korea’s stock market tumbled on external shocks this year, starting with a Chinese stock market crash on the first trading day of 2016. The benchmark KOSPI index moved from 1961.31 points on Dec. 30, the last trading day of 2015, to 1,890.86 points on Tuesday.

The swings in local stock prices were not as big as seen in some other markets, Yoo said.

“Still, we will stay vigilant for further market volatility through round-the-clock monitoring and response mode together with related authorities,” he added.

On financial reforms, the chief regulator said the local industry must fully adopt a performance-driven culture and move away from the long-held seniority-based pay system, for the initiatives to lead to broad-based changes.

“Last year, we laid the foundation for financial reform. This year, we aim to strengthen the efforts to bring the benefits of that reform down to the people through innovative products and services,” he said.

Korea will introduce a series of new measures this year, including individual savings accounts, independent financial advisors and equity-based crowdfunding. Yoo said the FSC will beef up support for fintech start-ups this year and promote adoption of new technologies by traditional financial institutions. 

By Lee Sun-young
(milaya@heraldcorp.com)