South Korean regulators highlighted the potential risks posed by the country’s financial sector’s significant investments in overseas real estate, which total approximately KRW2.46tr (USD1.85bn) in exposure. Despite concerns over the cooling commercial real estate market in the US and Europe, the Financial Supervisory Service (FSS) reassured that the impact on the industry would be contained. Korean financial institutions have invested KRW56.4tr in foreign real estate, a mere 0.8% of their total assets. The FSS noted that investments in the US market are the most considerable, but stressed that the sector’s strong loss-absorption capabilities should mitigate any significant system-wide effects, despite a 6.87% default rate in single-asset investments.