Officials of the Korea Exchange celebrate the benchmark Korea Composite Stock Price Index (KOSPI) surpassing the 9,000-point level at its headquarters in the southeastern city of Busan, June 18. Yonhap
Korea's financial system remains stable, but rising housing prices and growing leveraged investments amid a stock rally could fuel financial imbalances, the central bank said Wednesday.
"Despite domestic and external uncertainties, Korea's financial system is generally assessed as stable, supported by strengthening growth in the real economy as well as the sound resilience of financial institutions and the country's external solvency," the Bank of Korea (BOK) said in its report on financial stability.
"However, amid significantly heightened volatility in domestic financial and foreign exchange markets, potential risks remain latent sources of instability and warrant close attention."
The BOK said the potential risks include mounting financial imbalances stemming from a renewed surge in housing prices in Seoul and other areas, increased leveraged investment and concerns over the spread of nonperforming loans in vulnerable sectors.
