South Korean financial watchdog vows tighter debt, risk controls

South Korea’s Financial Supervisory Service (FSS) announced plans to strengthen the management of household debt and enhance financial risk monitoring in 2025, citing macroeconomic uncertainties such as an economic slowdown and potential shifts in monetary policy. In its policy report released Monday, the FSS warned of increased market volatility and emphasised the need for preemptive measures to detect potential risks. Together with the Bank of Korea, the FSS will conduct stress tests on financial institutions and bolster market oversight. The watchdog also aims to upgrade supervisory and regulatory frameworks, promote digital innovation through artificial intelligence, and support the financial sector in securing future growth engines. These initiatives are part of broader efforts to maintain market stability and adapt to evolving economic conditions.