South Korea takes measures in investment monitoring

SEOUL - Agence France-Presse

A currency trader watches monitors in front of screens showing the Korea Composite Stock Price Index. AP photo

The South Korean government unveiled measures yesterday allowing it access to more details on the activities of foreign investors in a bid to reduce volatility in financial markets.

Until now, Seoul banks must report a daily change of money volume in financial investment accounts held by foreigners.

But under a new rule to take effect in April, they will have to offer a detailed breakdown of the money flow by types of investment such as stocks and bonds, the Bank of Korea and the finance ministry said in a joint statement.

Tracking volatilities

The change will allow Seoul financial authorities to better track capital flows of foreign investors and to respond to sudden volatility in markets -particularly stock markets- more quickly and effectively, it said. “Since the global financial crisis, capital flows in foreigners’ stock trading have become far more volatile than before... the change will help us monitor the money flows of foreign investors more closely,” it said. The move came less than a week after the authorities announced a plan to lower the ceiling on foreign exchange forward positions by foreign and local banks in a bid to ease volatility in the currency market.