Call for ‘limit management’ to convene a securities company risk executive
“Actually, the message of regulation on credit loans”…The atmosphere has changed
[서울=뉴스핌] Reporter Lim Seong-bong = There are speculations that the government is putting a brake on the so-called stock debt investment, which is taking out debt and investing in stocks while tightening household loans. This is because the Financial Supervisory Service issued a consumer alert on the surge in debt investment, and then summoned the risk executives of each securities company to ask them to manage their credit limit. Analysts say that the FSS has sent a strong message to securities companies to alleviate the increase in debt investment.
According to the financial investment industry on the 28th, the Financial Supervisory Service (FSS) held a meeting of risk officers (CRO) of each securities company the day before and said, ‘Recently, credit loans from securities companies are increasing rapidly, which will put a burden on the soundness of securities companies in the future. can be spread’.
Although the Financial Supervisory Service did not directly express this to CROs, the financial investment industry is in fact accepting it as an order to reduce the limit on credit loans to securities companies. As the government’s stricter regulations on household loans have gradually increased, the financial investment industry is also predicting that the authorities will soon lift the limit on credit loan transactions by securities companies.
Earlier, on the day of the CRO meeting, the Financial Supervisory Service issued a consumer alert due to the surge in credit loans and counter-trading, and announced that ‘we plan to prepare additional countermeasures if necessary while continuously monitoring stock credit transactions and civil complaints’. is loading
According to the Financial Investment Association, credit transaction loans, which stood at 6.6 trillion won as of the end of March last year, surged 3.8 times to 25.7 trillion won as of the 13th of this month. In particular, in the past month, as volatility in the stock market increased, counter-trading soared. As of July, the daily average counter trade was 4.21 billion won, but last month it nearly doubled to 8.48 billion won. Cross-trading refers to the case in which an individual investor borrows money from a securities company to buy stocks and then the stock price plummets or the brokerage company forcibly disposes of the stock if the stock price plummets or fails to repay within the promised maturity.
As bank loans are gradually tightened as part of the government’s household loan management, the scale of stock investment is gradually increasing through relatively free loans from securities companies. In particular, with the boom in the domestic stock market over the past two years, the ability of securities companies to raise their equity capital has increased, and debt investment is on the rise. Unlike banks, securities firms can provide credit loans to investors up to 100% of their equity capital.
Moreover, as volatility in the stock market has increased, such as the Hengda Group scandal and the Bank of Korea’s move to raise the base rate, the FSS has been making urgent moves since this day, such as organizing a ‘internal and external risk situation review task force’. The financial authorities are also reported to have begun an internal review of regulations on credit loans as the increase in equity debt investment has not been significant.
Earlier, Financial Services Commission Chairman Ko Seung-beom also said, “I am well aware that credit loans can be a problem in terms of the soundness of securities companies, and counter-trading can cause problems such as investor protection and increased market volatility. said.
For this reason, it is known that securities companies are considering ways to manage the credit loan limit within 70-80% of their equity capital. In fact, it is judged that the government’s full-fledged regulation has entered the countdown, but large securities firms are starting to take preemptive risk management.
An official from a large securities company said, “Neither the FSC and the Financial Supervisory Service have done much in the past when the size of credit loans increased, but they seem to change the mood as the volume of counter-trading increases.” “It’s a way to stop the bleeding,” he said.