Seoul: South Korea's financial regulator asked local banks on Monday to play an active role in providing funds for businesses facing difficulties due to the Donald Trump administration's sweeping tariffs. Kim Byoung-hwan, the chief of the Financial Services Commission (FSC), made the call during a meeting with the heads of the top five financial holding firms. They are KB, Shinhan, Hana, Woori and NH Nonghyup.
According to Yonhap News Agency, Kim expressed concerns that the United States' reciprocal tariffs may not only directly affect exporters but also cause difficulties for their partner firms. He emphasized the need for banks to closely monitor market conditions and business impacts, ensuring that the necessary funds and support are provided in a timely manner.
Trump has vowed to impose "reciprocal" tariffs on imports from most of the world, including 25 percent duties on South Korean goods, set to take effect on Wednesday (U.S. time). Additionally, a 10 percent "baseline" tariff on foreign imports was implemented starting Saturday. The scheme is feared to trigger a global trade war and potentially lead to an economic recession. The South Korean government is working on countermeasures amid growing concerns about the impact of the tariff policy on its export-driven economy.
Kim highlighted the high level of uncertainty across the domestic economy, industries, and financial markets due to the tariff policy. He urged financial holding companies and policy finance institutions to lead in stabilizing the market and play a more active role in providing financial support to businesses and other sectors. The regulator is committed to implementing market stabilization measures worth 100 trillion won (US$68.12 billion) to minimize market volatility.
The FSC has launched a round-the-clock monitoring system to detect and respond to market volatility, with a promise to intervene if necessary to minimize disruptions.