State-run think tank pushes stronger regulations for large securities firms
A state-run think tank said Wednesday that as Korea's large securities firms grow in size, regulations governing their financial health should be strengthened, warning that the current method creates a misleading impression of soundness. The Korea Development Institute (KDI) said in its latest report that the calculation of the net capital ratio (NCR) for large securities firms should be reverted to the method used before 2016. The NCR measures the proportion of net operating capital to gross risks and is a key indicator of a financial investment company's stability. "The current NCR system does not fully reflect the increasing risks faced by large securities firms," said Hong Jong-soo, a KDI researcher. He noted that the formula adopted in 2016 creates the illusion of an improved NCR as asset size increases, even as underlying risks grow, giving the impression that large securities firms remain financially sound despite a sharp rise in debt. Total assets of domestic securities firms grew from 199.8 trillion won ($134.9 billion) in 2010 to 851.7 trillion won in the first half of this yearWeiter zum vollständigen Artikel bei Korea Times
Quelle: Korea Times