Chief financial regulator calls for ‘calm’ and ‘rational’ action following stock market plunge

The head of South Korea's financial regulator on Monday called for "calm" and "rational" decisions by investors after the local stock market slipped to a near nine-month low amid fears of a U.S. economic slowdown, insisting that the country's own economic fundamentals remain strong and on the path to recovery. Kim Byoung-hwan, the chief of the Financial Services Commission (FSC), also urged complete preparedness to immediately take market stabilization steps if necessary. "Now is the time when we need calm and rational decision-making by market players since our economy maintains a stable growth momentum, as well as enough capacity to deal with external risks," Kim said in an emergency meeting to check market conditions following the sharp decline in the local stock market. "There is a need to closely examine the reason our stock market reacts sensitively to external risk factors, and to reform the stock market so as to minimize such a phenomenon," Kim told the meeting, according to the FSC. The meeting, also attended by the chief of the Financial Supervisory Service, Lee Bok-hyun, came after the local stock market closed sharply lower, with the benchmark Korea Composite Stock Price Index dipping 234.64 points, or 8.77 percent, to 2,441.55, the lowest closing price since Nov. 15. The FSC chief noted fears of an economic slowdown in the United States are causing havoc in many economies around the globe, but that the decline in the local market was "too excessive," considering the country's economic and financial conditions. "There is a need to watch out against a further spread of anxiety or herding so that stock market fluctuations will not further expand," he was quoted as saying. To this end, the FSC chief reiterated the need to reform the fundamental makeup of the local stock market, calling for efforts to "deal with fundamental issues facing our stock market, in addition to the ongoing corporate value-up program and efforts to eradicate the so-called Korea discount." Source: Yonhap News Agency