S.Korea financial watchdog urges securities firms to have ‘contingency’ plans against market volatility

South Korea’s financial watchdog has called on securities firms to develop “contingency” plans in response to heightened market volatility stemming from ongoing political unrest.

The call follows Wednesday’s turmoil in local financial markets, triggered by President Yoon Suk Yeol’s late-night declaration of martial law on Tuesday. The decree was swiftly overturned by a parliamentary vote hours later. Earlier on Thursday, the opposition-controlled National Assembly filed a motion to impeach Yoon over the controversial attempt to impose martial law.

The Korea Composite Stock Price Index (KOSPI) reflected the instability, dropping 10.64 points, or 0.43 percent, to 2,453.36 in early trading, after falling 1.44 percent the previous day.

“The local stock, currency markets have shown signs of stabilising yesterday, but market volatility is feared to increase depending on the degree of political uncertainties,” said Hahm Yong-il, senior deputy governor of the Financial Supervisory Service, during a meeting with top executives from securities firms.

Hahm urged firms to prepare for various scenarios and implement measures to mitigate potential disruptions caused by the political crisis. His warning underscores the financial sector’s focus on safeguarding stability amid uncertain times.

Attribution: Yonhap