Seoul: The chief of South Korea's financial watchdog said Tuesday the country needs to map out all feasible measures for the market stability and prudence of financial institutions amid increased volatility.
According to Yonhap News Agency, in a meeting with staff, Lee Bok-hyun, governor of the Financial Supervisory Service (FSS), expressed concerns that the United States' reciprocal tariffs might trigger a global trade war. Such developments could potentially lead to an economic slump and further increase market volatility.
"We need to analyze the impacts from the looming tariff war and take measures in advance to minimize any fallout," Lee emphasized, highlighting the importance of proactive measures.
The FSS chief also underscored the need to thoroughly monitor the capital market and ensure the prudence of banks to safeguard against any adverse impacts.
On Monday, the benchmark Korea Composite Stock Price Index (KOSPI) plunged by more than 5.5 percent, marking a fourth consecutive session of losses. This drop was attributed to investor concerns over a possible global trade war, exacerbated by the U.S.'s implementation of reciprocal tariffs.
Additionally, the South Korean won experienced its sharpest decline against the U.S. dollar since the COVID-19 pandemic, further intensifying the financial instability.