Journalist
Seo Hye Seung, Kim Yeon-jae
duswogmlwo77@ajupress.com
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Korean banks' Q1 net profit edges down on bond valuation losses SEOUL, May 20 (AJP) - Although South Korean commercial banks saw their interest income expand in the first quarter of this year, driven by loan growth and improved net interest margins (NIM), their overall net profit declined due to widening valuation losses on bond holdings triggered by a sharp spike in market interest rates. Analysts say that while household debt continues to grow, the banking sector's profitability structure is becoming increasingly sensitive to interest rate volatility. The combined net profit of domestic banks stood at 6.7 trillion won ($4.56 billion), down 300 billion won, or 3.9 percent, from the same period last year, Financial Supervisory Service (FSS) said Wednesday. Net profit for nationwide commercial banks stood at 4.3 trillion won, ticking up 100 billion won, or 1.6 percent, year-on-year, but a detailed breakdown showed that the growth of internet-only banks — such as KakaoBank, K-Bank, and Toss Bank — buffered the overall performance. Net profit for internet-only banks jumped 45.3 percent - from around 200 billion won in the first quarter of last year to 300 billion won in the first quarter of this year. Net profit at core nationwide commercial banks, in contrast, slid 0.6 percent from 3.8 trillion won to 3.7 trillion won, while regional banks' net profit growth flattened with a mere 10 billion won increase. Interest income continued its upward march. Domestic banks' interest income for the first quarter reached 15.8 trillion won, up 1 trillion won, or 6.4 percent, from a year earlier. This expansion was fueled by a 4.8 percent year-on-year increase in interest-bearing assets, such as loan receivables, alongside a rise in the net interest margin (NIM) from 1.53 percent to 1.56 percent. The expansion of banks' interest income is analyzed to be aligned with the recent upward trend in household debt. Household lending by commercial banks in the first quarter swung to a 200 billion won decline in the first quarter from the previous quarter, whereas lending by non-bank depository institutions surged by 8.2 trillion won, according to the Bank of Korea's Tuesday release. The quarterly increase in housing-related loans within the non-bank sector widened from 6.5 trillion won in the fourth quarter of last year to 10.6 trillion won in the first quarter of this year. However, skyrocketing market interest rates weighed heavily on bank profitability. Domestic banks' non-interest income plummeted 35.6 percent year-on-year to 1.3 trillion won. The FSS attributed the decline to widening valuation losses on marketable securities following the spike in market interest rates. Gains related to marketable securities swung from a 2.4 trillion won surplus to a 1.2 trillion won deficit, while valuation profits on securities plummeted from a 1.4 trillion won surplus to a 1.8 trillion won loss. The financial watchdog evaluated that skyrocketing bond yields were the primary catalyst for the widening deficits. The three-year benchmark government bond yield, which had dipped 1.9 basis points at the first quarter of 2025, surged 60.6 basis points from the end of last year to hit 3.557 percent as of late March, maintaining its weakening trend. With the 30-year U.S. Treasury yield hovering at 5.2 percent — its highest level in approximately 19 years since 2007, just ahead of the global financial crisis — South Korea's three-year government bond yield rose by more than 4 basis points during Wednesday's morning session to hit 3.8 percent. The 10-year yield climbed roughly 6 basis points to the 4.27 percent mark, extending the market's downward momentum. The return on assets (ROA) dipped 0.07 percentage points year-on-year to 0.64 percent, while the return on equity (ROE) also slid 0.89 percentage points to 8.68 percent. The deteriorating indicators underscore a widespread contraction in the banks' earnings capacity. Credit losses and provisions, meanwhile, fell 16.2 percent year-on-year to 1.4 trillion won. Banks appear to have averted a worst-case scenario for now, as bond valuation losses stemming from rate volatility have exerted a more pronounced impact on bank earnings than widening defaults or non-performing loans. Given rising internal and external uncertainties, the FSS stated that it will guide banks to bolster their loss-absorption capacities to ensure financial soundness even in the face of unexpected shocks. 2026-05-20 11:16:54 -
Korea's bond and currency retreat deepens rate hike bias SEOUL, May 19 (AJP) - South Korean bonds and currency took a renewed beating amid broad strengthening in the greenback and a global debt retreat amid jitters over government borrowing to finance war costs and inflation risks with little sign of the Gulf crisis abating. Long-dated sovereign bonds across major economies — including the United States, Japan, and the United Kingdom — have hit levels unseen in two to three decades. And Korean bonds rank among the worst performers, despite the country's inclusion in the FTSE World Government Bond Index (WGBI). Korea's 10-year benchmark yield closed Tuesday at 4.210 percent, easing 2.9 basis points from Monday's annual high of 4.239 percent, narrowing the spread with the equivalent U.S. Treasury to just 36 basis points. The 10-year U.S. Treasury was trading at 4.608 percent as of 0545 GMT. Unlike equities, Korean bonds have been battered by prolonged Middle East conflicts. The 10-year yield has surged more than 31 basis points since end-April and 85 basis points since December — outpacing a 22-basis-point rise late April and a 42.64-basis-point climb from December in equivalent U.S. Treasuries, and a 21-basis-point and 67-basis-point jump in Japanese government bonds over the same periods. Concerns are mounting domestically that bond supply-and-demand conditions are deteriorating rapidly. Kang Seung-won, a fixed-income analyst at NH Investment & Securities, attributed the recent yield spike not to a simple sell-off but to a "buyer strike." Investors, he said, are reluctant to aggressively buy bonds at a time when the government is expanding issuance, the economy is holding up better than expected, and the central bank has kept the door open to further tightening. The government set its Treasury bond issuance volume for May at approximately 19 trillion won, up from the prior month. Market observers noted that despite improving prospects for tax revenue on the back of a semiconductor sector recovery, signals that the government intends to channel those resources into economic stimulus rather than fiscal consolidation have added further pressure to the bond market. "Since the government has shown a stance averse to tightening, a sentiment appears to be spreading that additional Treasury issuances could be on the horizon," a bond market source said on condition of anonymity. The global bond rout is compounding the pressure. The U.S. 30-year Treasury yield hovered at 5.18 percent on Monday, its highest in roughly 19 years, while Japan's 10-year yield touched 2.789 percent Tuesday, a near 29-year high. Markets have pointed to soaring energy prices stemming from the Middle East conflict and anxiety over expanded fiscal spending by major economies as key drivers of upward pressure on long-term rates. Global financial markets are also reassessing the return of so-called bond vigilantes — investors who protest runaway inflation and heavy government borrowing by selling bonds and driving yields higher. Analysts noted that anxiety intensified after U.S. Treasury Secretary Scott Bessent refrained from offering market-stabilizing assurances during the recent Treasury sell-off. The won has mirrored the bond market's woes. The currency closed at 1,505.7 per dollar in Seoul on Tuesday, strengthening 7.4 won from the previous session, though it remains under sustained pressure. The won had briefly recovered to 1,470.5 on May 6 — buoyed by broad dollar weakness and a concentrated wave of exporter dollar-selling — but the rebound proved short-lived. As Middle East risks re-escalated and pushed international crude prices back above $100 per barrel, safe-haven demand for the dollar reasserted itself. South Korea's heavy dependence on crude oil imports is seen as a key amplifier of won weakness: rising oil prices tend to push up import costs and widen the trade deficit, fueling further dollar demand among market participants. Combined with the bond market's deterioration, fears of foreign capital outflows are growing. If the dual weakness in bonds and the currency — marked by simultaneous rises in long-term yields and the exchange rate — persists, broader domestic financial market volatility could escalate. 2026-05-19 17:13:01 -
Seoul ups financial scrutiny on leverage ETFs amid frenzy SEOUL, May 19 (AJP) -South Korea's Financial Supervisory Service (FSS) has unveiled a sweeping set of preemptive consumer protection measures targeting leverage exchange-traded funds, social media investment influencers, and corporate insurance agencies, as domestic stock market volatility continues to climb. FSS Governor Lee Chan-jin chaired the second Consumer Risk Response Committee meeting at the agency's Seoul headquarters on Tuesday, where attendees reviewed emerging risk factors across financial markets amid what regulators described as overheated competition among financial firms. The financial regulator flagged growing concern over debt financed investing, noting that turnover ratios for major leverage and inverse ETF products remain significantly higher than those for general equities. The country's first single-stock leverage ETF will debut on May 27. The FSS plans to conduct intensive inspections of management status, disparity ratios, and trading trends across leverage and inverse ETFs, while issuing investor caution notices and reviewing asset managers' marketing practices. To prevent consumers from mistaking high-risk instruments for conventional ETFs, the watchdog called for clearer disclosure of core risk descriptors — such as "single-stock" and "leverage/inverse" — in product names and advertisements. Current rules require a minimum deposit of 10 million won (approximately $6,665) and mandatory prior training before investing in such products. The FSS took direct aim at so-called finfluencers — a portmanteau of "financial" and "influencer" — who have exploited recent market swings to generate personal gains. The FSS cited cases of influencers recommending stocks they had already purchased without disclosing conflicts of interest, as well as others operating paid stock-tip subscription services without registering as discretionary investment advisory businesses. The agency said it will deploy an AI-based monitoring system for round-the-clock surveillance of finfluencer activity, while stepping up enforcement on illegal financial advertisements in coordination with the Korea Communications Standards Commission. In insurance, the FSS singled out deceptive solicitation practices by general agencies (GAs) — corporate insurance intermediaries whose affiliated planners numbered 316,000 at end-2024, representing roughly 59.2 percent of all insurance planners nationwide. The watchdog said some agencies have been steering clients toward unnecessary policies under the guise of tax or labor consulting, and engaging in illegal private financing. Proposed regulatory reforms include restricting GAs from concurrently operating consulting businesses and imposing stricter penalties for sanction evasion. The committee also reviewed risks related to AI-powered cyberattacks, low early-termination interest rates at mutual financial cooperatives, and consumer access issues involving basic living expense accounts. "We must respond with a high level of vigilance against actions that fuel excessive debt investments and leverage trading by financial companies, as well as capital market disruptions by some finfluencers amid persistent stock market volatility," Lee said. 2026-05-19 16:21:39 -
Korea's household debt tips over $1.3 trillion Q1 SEOUL, May 19 (AJP) - South Korea’s household debt climbed to the brink of the symbolic 2,000 trillion won ($1.33 trillion) threshold as of March as tighter bank regulations failed to stop a fresh wave of housing-related borrowing that increasingly migrated to non-bank lenders. Outstanding household credit reached 1,993.1 trillion won at the end of March, up 14 trillion won, or 0.7 percent, from the previous quarter, according to preliminary data released by the Bank of Korea (BOK) on Tuesday. The annual growth rate accelerated to 3.5 percent from 2.9 percent in the fourth quarter. Household loans accounted for 1,865.8 trillion won of the total, rising 12.9 trillion won on quarter, while credit card and installment debt increased 1.1 trillion won to 127.3 trillion won. The increase was driven overwhelmingly by housing demand rather than consumer spending, underscoring how Korea’s property market continues to fuel leverage despite prolonged efforts by regulators to cool borrowing. Housing-related loans — a newly renamed category previously classified as mortgage loans — expanded by 8.1 trillion won in the January-March period, up from a 7.2 trillion won increase in the previous quarter. Other loans, including personal credit lending, also rose at a faster pace, increasing 4.8 trillion won after a 4.1 trillion won gain three months earlier. The more striking shift came from where the borrowing occurred. Commercial bank household lending, which had increased by 6 trillion won in the fourth quarter, swung to a 200 billion won decline in the first quarter as tighter lending controls curbed bank-based mortgages. But the slowdown merely pushed borrowers toward secondary lenders. Loans extended by non-bank depository institutions nearly doubled in growth pace to 8.2 trillion won from 4.1 trillion won in the previous quarter, according to the BOK. Housing-related lending at those institutions surged 10.6 trillion won, sharply accelerating from a 6.5 trillion won increase three months earlier. Mutual finance cooperatives accounted for 5.1 trillion won of the increase, while Saemaul Geumgo, or MG Community Credit Cooperatives, added another 2.4 trillion won. “The recent rise in housing transactions means we need to closely monitor related lending trends,” Lee Hye-young, head of the Financial Statistics Team at the BOK, said during a briefing. The data suggest regulators may be containing risk within the banking sector only to see leverage resurface elsewhere in the financial system — a recurring concern in Korea’s long-running household debt cycle. By contrast, signs of consumer weakness remained limited. Growth in merchandise credit slowed to 1.1 trillion won from 3 trillion won in the previous quarter, but the central bank said seasonal factors likely accounted for much of the moderation, noting that card spending typically peaks in year-end quarters. In a notable methodological change, the BOK also began separately disclosing jeonse loans — financing tied to Korea’s lump-sum rental deposit system — from commercial banks. The central bank said the split was necessary because such loans have expanded rapidly over the past decade and have become increasingly important in assessing housing-related debt risks. Outstanding jeonse loans at commercial banks reached 165.7 trillion won at the end of March, accounting for 16.6 percent of total commercial bank household lending. The figure has surged more than sixfold since 2015, when related balances stood at just 25.3 trillion won. 2026-05-19 13:50:29 -
Financial authorities to tighten liquidity rules for securities firms SEOUL, May 18 (AJP) - Financial regulators are going to tighten the rules for their assessment for how securities firms can raise cash quickly during a financial crisis, the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) said on Monday. The stricter rules, which used to apply only to big brokerages, will now cover all firms. They will also value assets such as stocks and funds at less than their full market value, since these can be difficult to sell quickly during a financial crisis. Under the proposed amendments, the measures are intended to address vulnerabilities exposed during the 2022 crisis involving amusement park Legoland, when brokerages faced severe liquidity shortages and required emergency government support despite reporting liquidity ratios above 100 percent. The most significant shift is the expansion of the regulatory scope. Only comprehensive financial investment business entities - large investment banks - and brokerages issuing derivative products were required to maintain liquidity ratios above a certain level. But this requirement will become mandatory for all 49 securities firms. The aim is to bring small and medium-sized brokerages, which possess relatively weaker capital-raising capabilities into the risk management perimeter. About a dozen branches of foreign firms will be excluded from the new measures as they primarily engage in brokerage and advisory services that have a minimal impact on liquidity risk, according to the FSS. Previously, brokerages could count their stock and bond holdings at full value when calculating liquidity. But those assets will be discounted to account for the losses that can occur when firms are forced to sell quickly in a stressed market. For example, government and municipal bonds will continue to be counted at full value (100 percent). However, assets that are more vulnerable to panic selling during a crisis - such as listed equities, foreign securities, and open-ended funds — will be discounted by 15 percent, meaning only 85 percent of their value will be recognized as usable liquidity. Conversely, when calculating liabilities, "potential debt" (contingent liabilities) such as loan commitments and debt guarantees must be strictly included in current liabilities. Money that a brokerage must pay or repay on behalf of clients during a crisis will be preemptively categorized as debt to evaluate practical risk exposures. Non-liquid assets such as closed-ended real estate funds will have their liquidity timelines tied strictly to their remaining maturity rather than arbitrary liquidation estimates. Regulators will also differentiate regulatory burdens for repurchase agreement (RP) sales and securities lending transactions, which are frequently used for short-term cash generation, based on the creditworthiness of the underlying collateral. Financial authorities are simultaneously moving to strengthen the risk weights for real estate Net Capital Ratios (NCR) and establish aggregate investment caps to manage exposures in real estate financing. For major comprehensive financial investment entities, a separate, differentiated capital regulation framework will be prepared within this year. The proposed amendments will be subject to a regulatory change notice later this week to gather industry feedback before taking effect on Jan. 1 next year. 2026-05-18 17:56:34 -
Nasdaq IPO blitz threatens South Korean stock market SEOUL, May 18 (AJP) - Amid unresolved bottlenecks around the Strait of Hormuz, high-profile United States companies including SpaceX, OpenAI, and Anthropic are preparing for consecutive initial public offerings (IPOs) later this year. With foreign capital expected to flock to these massive listings and South Korean investors steadily expanding their overseas portfolios, forecasts are emerging that the domestic stock market could face a correction. The benchmark KOSPI closed 0.31 percent higher at 7,516.04 on Monday. While it recouped some losses on growing expectations that the general strike at Samsung Electronics would come to an end, the index had plunged below the 7,100 mark early in the session, following a decline of more than 6 percent last week. East Asian stock markets had previously pushed higher despite the escalating blockade of the Strait of Hormuz. The KOSPI hit a record high of 7,981.41 at Thursday’s close last week, while Japan’s Nikkei 225 similarly touched an all-time high of 63,442.50 on May 10. Analysts point to various factors behind the sudden stagnation or decline of Asian markets that had seemed bound for endless gains, with the upcoming series of megacap listings in the United States being cited most frequently. The most anticipated listing is SpaceX, which operates small-satellite launch vehicles and manned spacecraft operations. SpaceX is a dominant leader in capturing and deploying multiple satellites into low Earth orbit (LEO). Up to 70 percent of active satellites currently in orbit were launched via the company’s rockets, and 97 percent of global satellite internet speed tests are conducted through its Starlink service. Its broad portfolio, spanning civil and military applications, is considered a core strength. Most notably, its reusable launch vehicles, led by the Falcon 9, allow the company to perform launches at costs up to three times lower than competitors in China and Russia, attracting clients worldwide. Consequently, markets expect SpaceX’s public offering to be the largest in history. Prominent asset management firms, including Morgan Stanley and Goldman Sachs estimate the size of the offering could reach up to $75 billion. This would more than double the previous record of $29.4 billion set by Saudi Aramco, the world's largest oil company, in 2019. The complicating factor is the rising volume of overseas investment by South Korean nationals. In 2025, South Koreans poured an estimated $114.4 billion into overseas equities, more than doubling the roughly $42 billion that flowed out in 2024. The combined value of foreign direct investment into South Korea during the same period stood at only $36 billion. The Bank of Korea (BOK) had sought to incentivize domestic investment by launching Reshoring Investment Account (RIA) products to curb the local currency's sharp depreciation, which fell 6.5 percent over the past year from 1,390 won per dollar in May 2025 to 1,480 won per dollar this May. However, with the SpaceX IPO becoming tangible, those plans are in jeopardy. With leading artificial intelligence companies like Anthropic and OpenAI scheduled for large-scale listings later this year - or the first quarter of 2027 at the latest - capital flight from the South Korean securities market is projected to accelerate. Some forecasts suggest these two firms could even surpass SpaceX’s record-breaking offering size. Domestic brokerage firms are racing to launch SpaceX-related exchange-traded funds (ETFs). Firms, including Korea Investment Management and Mirae Asset Global Investments, are rolling out aerospace-focused ETFs in an effort to retain domestic capital. Yet, blocking the correction appears challenging given the lowered barriers to foreign market entry. While forecasting that the KOSPI could reach 9,000 by the end of the year, NH Investment & Securities projected that "large-scale IPOs such as SpaceX and OpenAI could temporarily dampen the South Korean securities market." "The scale of domestic capital shifting overseas could be substantial," Mirae Asset, which has aggressively invested in SpaceX, also warned of a short-term shock. 2026-05-18 16:34:32 -
Finance chief Koo departs for Paris G7 meeting, London investment relations session SEOUL, May 18 (AJP) - Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol departed on Sunday to attend the Group of Seven Finance Ministers and Central Bank Governors meeting and to host a South Korean economy investment relations session. Amid expanding volatility in international oil prices and exchange rates driven by the stalled dispute between the U.S. and Iran, the government plans to manage national creditworthiness through briefings for foreign investors and consultations with financial authorities of major nations. According to the Ministry of Economy and Finance, Koo will attend the G7 Finance Ministers and Central Bank Governors meeting in Paris, France, on Tuesday. The meeting will be attended by G7 member nations—including the United States, Japan, the United Kingdom, France, Germany, Italy, and Canada—alongside invited countries such as South Korea, India, Brazil, and Kenya, and leaders of major international organizations including the IMF, World Bank, OECD, and Financial Stability Board (FSB). Koo is also scheduled to hold bilateral meetings with British Chancellor of the Exchequer Rachel Reeves, Canadian Minister of Innovation, Science and Industry François-Philippe Champagne, and German Vice Chancellor and Minister of Finance Lars Klingbeil to discuss economic and financial cooperation. While South Korea is not a full member of the G7, it has been repeatedly invited to major multilateral economic meetings due to its supply chain stability and competitiveness in the semiconductor and AI industries. The government is also emphasizing that South Korea can serve as a "middle-power platform" bridging advanced and emerging economies. The upcoming meeting will primarily focus on global imbalances and the establishment of international partnerships. Recently, "global imbalances"—such as excessive surpluses in China and oil-producing nations and foreign exchange instability in emerging markets caused by dollar dominance—have re-emerged as key global economic issues. In his opening remarks, Koo plans to emphasize that the complex crises stemming from the prolonged Middle East conflict cannot be resolved by the efforts of a single country, while sharing South Korea’s emergency economic response plans and policies to boost domestic demand and investment. He will also present perspectives on major global issues from a middle-ground position connecting G7 members and emerging countries. Prior to the G7 schedule, Koo will host an investment presentation on the South Korean economy for major global investment institutions in London on Monday morning, local time. The government plans to explain the global competitiveness of the Korean economy, alongside core policy directions such as capital market advancement and the implementation of a hyper-innovative economy, while calling for active investment expansion in South Korea. The government has recently focused on improving accessibility for global investors through foreign exchange market structural reforms and capital market advancement policies. Representative examples include the extension of foreign exchange market operating hours, the reorganization of the short-selling system, and efforts for inclusion in the World Government Bond Index (WGBI) since April, as well as ongoing bids to join the Morgan Stanley Capital International (MSCI) Developed Markets (DM) Index. London is evaluated as one of Europe's largest financial hubs, where major global bond and foreign exchange investors are concentrated. Amid expanding volatility in global capital flows due to geopolitical risks in the Middle East and a strong dollar, the government appears focused on securing trust in the Korean market through direct contact with overseas investors. On the same day, Koo will hold individual meetings with top executives from major global financial firms, including HSBC and Schroders. The meetings will cover the current state of the global economy and international financial markets, alongside explanations of the South Korean government’s foreign exchange and capital market reform efforts and improvements to the investment environment. Koo will subsequently meet with European Bank for Reconstruction and Development (EBRD) President Odile Renaud-Basso to discuss development cooperation projects integrating artificial intelligence (AI) and support measures for developing nations. 2026-05-18 12:55:51 -
BOK brings on hawkish new member SEOUL, May 15 (AJP) - Kim Jin-ill, a former professor at Korea University, held his inauguration ceremony on Friday, to succeed Shin Sung-hwan, who retired from the Bank of Korea’s (BOK) Monetary Policy Board earlier this week. Kim is expected to strengthen the BOK’s hawkish stance with his focus on the traditional role of a central bank. Kim held a private inauguration ceremony at the BOK on Friday afternoon. This comes just four days after the Korea Federation of Banks (KFB) recommended him as a board member following Shin’s departure. Kim’s term officially began this Tuesday, immediately after Shin’s retirement, in accordance with the Bank of Korea Act. The right to nominate the five board members, excluding the BOK governor and senior deputy governor, lies with the BOK governor, the Minister of Economy and Finance, the Financial Services Commission chairman, the chairman of the Korea Chamber of Commerce and Industry, and the chairman of the KFB. Since Shin was appointed upon the KFB’s recommendation, the vacancy was filled by the same body. In contrast to Shin, who was known for his strong dovish tendencies—issuing seven dissenting opinions, five of which favored rate cuts—Kim is an expert who emphasizes the traditional roles of a central bank. He is recognized as a "U.S. expert," having conducted research as an invited economist at the U.S. Federal Reserve from 1996 to 1998 and from 2003 to 2010. Given that this appointment comes under the leadership of Governor Shin Hyun-song, a traditional financial stability advocate who succeeded former Governor Rhee Chang-yong, the central bank is expected to place more weight on monetary policy itself moving forward. Notably, Kim views himself as a relative hawk compared to other board members. In an interview with a media outlet shortly after his nomination, Kim stated that if he were to place a dot on the BOK’s dot plot, it would be "half a click (0.125 percent)" above the average or median. He did not hide his intention to prioritize financial stability, aligning with Governor Shin’s past stance of suggesting preemptive rate hikes during the 2008 financial crisis. In his inauguration speech on Friday, Kim opened by stating that "inflationary concerns have intensified due to high oil prices caused by the war in the Middle East" and mentioned exchange rate risks stemming from capital outflows. He clearly signaled that he would prioritize price stability. The increasing likelihood that the U.S. Federal Reserve will not cut interest rates is another burden. While Fed Chair-designate Kevin Warsh, often called a "hawkish dove" for advocating simultaneous balance sheet reduction and rate cuts, is set to begin his term soon, the timing of any cut has become uncertain. U.S. consumer prices rose 3.8 percent in April, the highest in about three years since May 2023. Some presidents of major regional Federal Reserve Banks, including Chicago and Boston, have even suggested rate hikes, forcing the BOK to prepare accordingly. However, Kim drew a line against the possibility of a radical rate hike, citing the 2,000 trillion won ($1.36 trillion) in household debt and the steady rise in apartment prices. Under the leadership of former Governor Rhee, the BOK had frozen the benchmark interest rate at 2.5 percent for seven consecutive sessions until April 10, following its last cut in May last year, to account for households' debt repayment capacity. Kim has not ruled out the possibility of aligning with this cautious approach. 2026-05-15 16:57:45 -
Artists Struggle with Lengthy Process of Arts Activity Certification Illustrator Jeong So-hee took over two years to pass the Arts Activity Certification process. Despite having over 20 exhibitions to his name, he faced repeated rejections and requests for additional documentation before finally receiving approval this year. He stated, "I had to invest more energy in writing a report to prove I am an artist than in creating my work."The controversy surrounding the Arts Activity Certification is spreading throughout the cultural and artistic community. Artists point to the unclear evaluation criteria, prolonged delays in the review process, and administrative standards that are disconnected from reality as issues that need addressing.On November 6, 2010, Lee Jin-won, a solo indie band member of 'Moonlight Fairy Home Run,' was found dead at his home in Yeongdeungpo, Seoul. A few months later, on January 29, 2011, screenwriter Choi Ko-eun was discovered dead at her residence in Seoksu-dong, Anyang. Both artists were well-known in the indie music and film industries but struggled with financial difficulties due to unfair contract structures and unstable incomes. Their deaths prompted the enactment of the 'Arts Welfare Law' on November 18, 2012, which led to the establishment of the Arts Welfare Foundation the following day.The Arts Activity Certification system aims to provide a minimum social safety net and access to welfare for struggling artists. It is considered a necessary qualification for applying to various government and public institution support programs, including creative grants, rental housing, employment insurance, and loan programs.However, artists on the ground express a lack of guidance regarding the system.Visual artist Shin Yoon-jung applied for the Arts Activity Certification four times but was rejected each time. He said, "I was at a loss about how to prepare because I couldn't understand the criteria for sincerity. Even trying to guess based on the experiences of other artists, the standards kept changing."Shin also eventually passed the review but has yet to receive a clear explanation from the welfare foundation regarding the reasons for his approval. He expressed concern about not being able to endure the same process if he were to be rejected in the next review.The review period has also been problematic. Artists, including Jeong and Shin, reported waiting at least three to six months for the results of their re-evaluations.Han Mo, 31, who has worked in stage direction, shared, "I received a 'not approved' notice while on my way from a logistics center to the theater. It felt pointless after waiting four months."Discrepancies between the review criteria and reality have also come under scrutiny.A flat painter pointed out that participation in art fairs, which are auction-style exhibitions, is not recognized as artistic activity. "The fastest way to establish a long-term relationship with a gallery and hold a solo exhibition is to pay to participate in an art fair," the artist explained. Despite submitting a history of participating in a prominent art fair known for showcasing emerging artists for several years to prove 'continuity,' he received a response stating, 'it cannot be recorded.'He added, "It doesn't make sense that even major art fairs like Kiaf/Frieze, which the First Lady has attended, cannot be recorded as they are not considered 'solo exhibitions.'"As dissatisfaction grew within the arts community, a discussion on the Arts Activity Certification was held on April 22, organized by lawmaker Son Sol at the National Assembly's Culture, Sports and Tourism Committee. Participants criticized the lack of clarity in evaluation criteria, poor communication, and the opacity of the review process.Installation artist Lee Seung-hyun stated, "We are not asking for the threshold to be lowered indiscriminately; we want to know what the problems are and what criteria lead to rejection."Calls for transparency in the review process were also voiced. Actor Oh Se-gon, who participated in the initial design task force for the Arts Activity Certification system, emphasized the need to clarify who the committee members are and whether there were offline discussions and debates.A survey conducted by artists themselves revealed similar sentiments. About 63.6% of respondents deemed the current evaluation criteria inappropriate, and 53% reported a lack of feedback regarding reasons for rejection.The Ministry of Culture and the welfare foundation also had their perspectives. Kim Ga-jin, head of the planning and coordination team at the Korea Arts Welfare Foundation, stated during the discussion, "We need to verify whether individuals are truly pursuing art as a profession, whether their results can be documented, and whether their works have been consumed and distributed to the public." She explained that the increasing number of applicants who do not meet all three criteria has made rejections unavoidable.Regarding delays in the review process, she noted, "The number of applications has surged, but we lack sufficient personnel to handle them," adding that currently about ten staff members are responsible for the reviews.As of March 2026, there are five full-time and five contract workers involved in the Arts Activity Certification review process. With 43,419 applicants' documents being reviewed by just over ten people, the lack of established criteria and delays are understandable, according to their explanation.However, there are voices on the ground that find these explanations insufficient.A notable example is the 'Youth Artists' Arts Activity Savings Account' program, which began last year. This initiative allows young artists to save a certain amount, with the government matching that amount. The program saw a large influx of applicants.However, as of February 4, 2026, the application period closed within half a day due to being 'first-come, first-served.' Critics point out the contradiction in explaining that the review process takes a long time due to a shortage of reviewers while support program applications close within a day.This year, the total budget for the Ministry of Culture, Sports and Tourism is approximately 7.8555 trillion won, an 11.2% increase from last year. Of this, the Arts Welfare Foundation's share is around 200 billion won. However, how that money is spent remains unclear.Artists emphasize that understanding the actual creative environment is more important than simply increasing the budget. Jeong, who previously spoke to the media, questioned, "I want to ask if the current criteria truly serve artists who are solely dedicated to creation," stressing the need for a broader understanding of artists' creative activities.* This article has been translated by AI. 2026-05-15 09:17:31 -
Korea's import prices ease in line with softer oil prices SEOUL, May 15 (AJP) - South Korea’s import prices fell against a double-digit jump in March last month on eased international oil prices despite prolonged Middle East crisis, helping to feed robust trade terms despite slower growth in export prices from strong chip demand. The import price index fell 2.3 percent in April after a 18 percent surge seen in March on lower international oil prices and U.S dollar. As the average price of Dubai crude fell 17.8 percent month on month in April, import prices of raw materials, including mining products, dropped 9.7 percent. Intermediate goods, which are closer to the prices felt by businesses, rose 2.1 percent from the previous month due to a lagging effect. Despite the decline in oil prices, products such as coal and petroleum (up 6.2 percent) and chemical products (up 1.7 percent) continued their upward trend as previous energy price hikes were reflected with a time lag. Against a year-ago, import prices were 20.2 percent higher. Among import items, mining products including crude oil jumped 36.5 percent on year, while import prices for coal and petroleum products rose 67.0 percent, further fueling overall upward inflationary pressure. Export prices rose 7.1 percent from the previous month, slowing from 17-percent jump in March. On year, they were 40.8 percent higher, strongest since 57.8 percent surge in March 1998. Key IT items, such as DRAM (up 232.8 percent) and computer storage devices (up 149.2 percent), led the index rise. Export price strengthening is primarily owed to semiconductor boom, unlike the past - when the surge was driven by a weak won plummeted around 1,800-level as of late 1997 and early 1998, and the transfer of raw material prices. Trade indicators improved as export prices (up 33.6 percent) rose at a faster pace than import prices (up 16.9 percent), leading to an increase in the net terms-of-trade index (up 14.3 percent) and the export volume index (up 12.4 percent). Yet, the situation requires close monitoring as upward pressure on prices across the industry remains firm. "While the rise in import prices has slowed due to the fall in international oil prices, intermediate goods prices remain high due to the time-lag effect," said Lee Moon-hee, head of the Price Statistics Team at the BOK’s Economic Statistics Department. "Given the continued rise in export prices driven by semiconductors and the fact that geopolitical risks in the Middle East have not been fully resolved, we must closely monitor the impact on domestic consumer prices in the future.” 2026-05-15 08:43:44