© Reuters. An worker walks at an empty park close to a monetary district amid the coronavirus illness (COVID-19) pandemic in Seoul, South Korea, September 10, 2020. REUTERS/Kim Hong-Ji/File Picture
SEOUL (Reuters) -South Korea’s monetary watchdog on Monday introduced a crackdown on careless danger administration by monetary companies as a part of a broader push to forestall the liquidity issues which have beset actual property initiatives from affecting monetary markets.
“Authorities is not going to tolerate practices of passing on dangers to customers and society by privatising short-term income with out thorough danger administration,” Lee Bok-hyun, governor of the Monetary Supervisory Service, mentioned at a media convention on the company’s coverage agenda for this 12 months, when South Korea will maintain normal elections.
Lee mentioned monetary companies that keep away from making correct provisions for losses may even be kicked out of the market.
Ever since mid-sized builder Taeyoung’s debt reimbursement troubles final December, South Korea’s monetary authorities have been pushing monetary companies to cut back publicity to actual property initiatives to forestall any spill-over onto monetary markets.
Lee mentioned that no actual property agency at present had the identical debt ranges as Taeyoung, which boded nicely for markets.
He mentioned the company was additionally investigating short-selling by overseas banks and can announce extra findings by March.
Requested in regards to the considerations of retail traders that their investments in equity-linked securities had been making losses, Lee mentioned authorities wouldn’t tolerate monetary companies that earn “excessively” via “wrongdoing” within the gross sales of spinoff merchandise”.