South Korea's financial market has maintained its stability despite the recent political turmoil, but authorities can't afford to be complacent, given a slew of remaining challenges, a top regulator said Tuesday.
Last week's court ruling that unseated Park Geun-hye from her presidential post cleared some political uncertainties here, largely drawing a positive response from local and foreign investors.
Jeong Eun-bo, vice chairman of the Financial Services Commission (FSC), speaks at a meeting on the capital market at the Korea Exchange in Seoul on March 14, 2017, in a photo provided by the FSC. (Yonhap)
The benchmark stock index KOSPI soared to 2,117 points Monday, the highest in nearly a year, on an increased inflow of foreign capital, improved corporate earnings and a rebound in exports.
"But it's true that our financial market is still confronted with a host of uncertainties," said Jeong Eun-bo, vice chairman of the Financial Services Commission, in a meeting on market stabilization at the country's bourse Korea Exchange in Seoul.
It was also attended by senior officials from the KRX, the Financial Supervisory Service, local securities firms, asset management companies and credit rating agencies.
External concerns include the US interest rate hike, its protectionist policies, South Korea's stand-offs with China and political incidents in Europe, he added.
"Internally, there are issues like the change in the political situation caused by the early presidential election and North Korea's provocations," Jeong said.
South Koreans will pick a new president in early May, seven months earlier than scheduled, due to Park's impeachment. Related legislation here calls for the selection of a new leader within 60 days of the impeachment of a president, although no new election date has been announced yet.
The FSC official stressed the government will strive for the stabilization of the capital market with a "higher sense of tension and alert than at any other time."
The authorities have contingency plans in place, and if needed, they will take swift and bold market stabilization measures based on the "joint emergency response system" of government offices and affected industries, he said.
He pointed out that South Korea's economy has a track record of successfully overcoming multiple crises, including those in 1998 and 2008.
Just as those experiences served as a chance for the growth and development of the economy, this time also provides an opportunity as long as the country copes with uncertainties by pooling its wisdom, Jeong said.
He also said regulators, in cooperation with prosecutors, will crack down on any manipulation of stocks believed to be linked to presidential hopefuls. (Yonhap)
