FSC's Annual Work Plan for 2025

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FSC's Annual Work Plan for 2025
Jan 08, 2025

The Financial Services Commission presented annual work plan for 2025 at the annual work report session jointly held for economic ministries under the theme of “economic risk management and revitalization of the economy” on January 8.

With market stabilization at the top of policy priorities, the FSC plans to work on strengthening the function of financial services in support for people’s livelihoods while continuing to push for innovation in the financial industry. The FSC’s annual work plan for 2025 is focused on three key goals—(a) ensuring market stability and providing support for the real economy, (b) facilitating a recovery in people’s livelihoods, and (c) adapting to changes and promoting innovation in the financial industry. Under these broad objectives, the FSC plans to pursue nine specific policy agendas.

Key Policy Agendas

First, the FSC will work on ensuring market stability and providing support for the real economy. In close cooperation with related authorities and organizations, the FSC plans to establish an overarching framework that can help to ensure financial market stability through an array of measures, such as the continuing operation of market stabilization programs (about KRW100 trillion), introduction of financial stability account for financial companies, making improvements to the recovery and resolution regime of financial companies, and raising deposit protection limit to KRW100 million from the current level of KRW50 million. In addition, the FSC will continue to manage the pace of household debt growth within the level of annual GDP growth through the enhanced debt service ratio (DSR) rules and seek regulatory improvements on real estate project finance loans to prevent the recurrence of project finance loan defaults by strengthening the equity capital requirement for developers.

At the same time, in order to bolster support for the real economy and industries, the FSC plans to expand the supply of policy funds to the largest level ever (KRW247.5 trillion) and allocate KRW136 trillion (up KRW20 trillion or 17.2 percent from the previous year) to the five key strategic sectors such as high-tech strategic sectors and new industry fields. More than 60 percent of policy funds will be frontloaded in the first half of 2025.

Second, the FSC will work to ensure a seamless implementation of measures to facilitate a recovery in people’s livelihoods. For the self-employed business owners who have not fallen behind on their loan payments, the banking sector’s assistance programs providing debt workout support in the amount of about KRW600 billion to KRW700 billion annually will be implemented promptly. For the self-employed business owners who have accrued overdue payments, the availability of debt adjustment support via New Start Fund will be expanded through a broadening of the eligibility base. In addition, the supply of microfinance assistance will be raised to KRW11 trillion from the current level of KRW10 trillion to help address the needs of vulnerable groups. At the same time, the FSC will seek various measures intended to lower financial burdens to help stabilize business management and boost consumption capacity. These measures include lowering card transaction fees for merchants, requiring payment gateway (PG) services to separately manage unsettled funds, and making improvements to early loan repayment charges. Moreover, in line with the implementation of the revised Credit Information Use and Protection Act scheduled to take effect from July this year, the FSC will work to root out illegal private lending practices and strengthen support for the annulment of private loan contracts that are deemed to be against conventional social norms.

Third, the FSC will actively pursue measures to adapt to changes and promote innovation in the financial industry. The FSC will seek bold regulatory reforms to make sure that financial businesses are able to properly serve their intrinsic functions and meet newly emerging demands. These measures include easing financial holding companies’ investment limit on fintech businesses to 15 percent from the current level of 5 percent, pursuing measures to improve insurance programs for the elderly amid an aging society, and enabling card payment transactions between individuals (for rent payments, second-hand market transactions, etc.). At the same time, the FSC will continue to pursue capital market reform and corporate value-up agendas by pushing for tax incentives for value-up companies, strengthening shareholder protection in corporate mergers and split-off IPOs, and introducing a mandatory bid rule in corporate mergers and acquisitions (M&As). Moreover, the FSC will seek a sweeping overhaul of the regulatory framework on electronic financial services and work to establish a legal framework on digital financial security to accelerate digital transformation in the financial industry. Through revisions to the guidelines on the use of artificial intelligence (AI), the FSC will also promote the use of AI by financial companies.

The FSC plans to maintain close communication with the financial sector and work to ensure swift implementation of the key policy agendas while continuing to search for additional areas to bring about improvements.

• Please refer to the attached PDF for details.

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