Press Briefing: FSC Chair Kim Byoung-hwan on Financial Regulations
Enhanced Bank Deposit Insurance Limit Set at 100 Million Won
Chairman Kim Byoung-hwan of the Financial Services Commission (FSC) addressed the media at the Government Complex Seoul in Jongno District, central Seoul, on May 7. Here's the lowdown on the key topics discussed.
Raising the Deposit Insurance Limit
In a major update, the FSC plans to double the deposit insurance limit from 50 million won to 100 million won, effective September 2025. This move is aimed at better reflecting South Korea's economic growth and enhancing financial stability. The increased limit is projected to cover more deposits, protecting an additional 5.53 million accounts, and raising the coverage ratio from 97.9% to 99.2%.
Financial System Confidence Boost
The revised deposit protection level will align South Korea with major global economies, boosting confidence in the country's financial system.
Impact on Lending and Deposits
Analysts foresee a potential shift in deposit flow from commercial banks to savings banks and mutual finance companies due to higher interest rates offered by the latter. The increased deposit protection could also lead to an estimated increase in deposits at non-banking financial institutions, ranging from 16 trillion to 40 trillion won. However, recent declines in savings bank deposits due to real estate risks might impact the actual scale of this movement.
No New Lending Rules as of Now
No specific updates on new lending rules were announced during the press briefing. The focus remains on enhancing deposit protection for South Korean depositors.
Stay tuned for more updates on the changes in South Korea's financial regulations and their potential impact on the economy.
- Chairman Kim Byoung-hwan of the Financial Services Commission (FSC) mentioned that the planned increase in the deposit insurance limit from 50 million won to 100 million won will boost confidence in South Korea's financial system, aligning it with major global economies.
- The FSC's plan to double the deposit insurance limit aims to reflect South Korea's economic growth and enhance financial stability, with the increased limit projected to cover more deposits and protect an additional 5.53 million accounts.
- Analysts predict that the increased deposit protection could lead to a potential shift in deposit flow from commercial banks to savings banks and mutual finance companies due to higher interest rates offered by these institutions, with the increase in deposits at non-banking financial institutions estimated to range from 16 trillion to 40 trillion won.
