South Korea’s Financial Services Commission (FSC) has set out an ambitious agenda to overhaul the country’s financial system, positioning reform as a central pillar of efforts to drive a “great takeoff” of the Korean economy.
The plans were presented during a government work report session held jointly with the Korea Fair Trade Commission on December 19, under the theme of pursuing a sweeping overhaul of finance, fostering a fair economy, and building robust economic foundations.
During the session, FSC chairman Lee Eog-weon outlined the regulator’s progress and achievements in 2025, alongside key policy priorities for the year ahead. The FSC’s overarching vision is to make Korea’s financial industry more productive, more inclusive, and more reliable, while ensuring it can better support households, businesses, and long-term economic growth.
Over the past six months, the FSC has focused heavily on stabilising livelihoods affected by the lingering impacts of the COVID-19 pandemic and sustained high interest rates. One of the most significant measures was the launch of the New Leap Fund on October 1, which enabled the acquisition, screening, and cancellation of long-term overdue personal debts for around 1.13 million individuals, without requiring debtors to apply directly. In addition, a credit recovery programme introduced on September 30 led to the expungement of overdue debt histories, allowing approximately 2.862 million individuals to rebuild their credit standing as of the end of November.
Support for small businesses and merchants has also been a priority. The FSC held twelve separate meetings with small merchants to better understand on-the-ground challenges and subsequently introduced a special financing support package worth more than KRW10 trillion. These measures were designed to ease cash-flow pressures and support recovery among vulnerable segments of the economy.
At the same time, the FSC has sought to contain financial risks and strengthen market discipline. Enhanced household debt management measures introduced on June 27 were aimed at curbing speculative borrowing in the housing market, helping to slow the pace of household debt growth. In response to tariff-related risks, policy financial institutions and private sector lenders coordinated support for domestic companies from September 3. The regulator also launched a joint response team on July 30 to tackle stock market manipulation, tightened penalty surcharge criteria, and rolled out an individual-based market surveillance system under a “one strike out” principle to deter unfair trading practices.
Looking ahead, innovation remains central to the FSC’s reform agenda. The establishment of a KRW150 trillion National Growth Fund on September 10 is intended to strengthen Korea’s competitiveness in high-tech industries. Additional measures include promoting balanced regional development, improving banks’ capital regulations to channel funding into productive sectors, and authorising new investment management account operators with obligations to supply venture capital. In response, private financial institutions have announced plans to provide more than KRW603 trillion in funding over the next five years, alongside record momentum in domestic equity markets.
Next year, the FSC plans to pursue these reform initiatives more rigorously, reinforcing its commitment to reshaping Korea’s financial system as a catalyst for sustainable and inclusive economic growth.
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