Ministry of Finance and Economy

On October 28, Deputy Prime Minister and Minister of Finance and Economy Lee Hyoung Il met with Head of Asia Pacific at Bloomberg Bing Li, to discuss ways to cooperate in advancing Korea’s financial markets.   During the meeting, Deputy Prime Minister Lee explained that the Korean government has continued to improve market accessibility for foreign investors following Korea’s inclusion in the World Government Bond Index (WGBI) in April 2026, and that Korea’s government bond market has gained international prominence and attracted growing interest from global investors. He also conveyed the need to review whether Korea’s classification as an emerging market in Bloomberg’s bond index* remains appropriate, given Korea’s standing in the global economy, the growth of its government bond market, and improvements in market accessibility. In particular, he highlighted that Korea is classified as an advanced economy by the International Monetary Fund and the World Bank and has made significant progress in improving market accessibility in recent years. He requested Bloomberg’s continued attention and cooperation to ensure that these achievements are fully reflected in its future review of country classifications.   * The Bloomberg Global Aggregate Index is one of the world’s three major global bond indices. Korea has been included in the index since 2002.   Deputy Prime Minister Lee also emphasized the importance of communication with global investors so that the government’s efforts to improve foreign exchange and capital market regulations can lead to increased investment. He called on Bloomberg to support communication between the government and markets through its various channels, including financial information services and media.   In response, Bing Li acknowledged the importance of continued communication and cooperation with the Korean government and reaffirmed Bloomberg’s commitment to working together to enhance global investor’s understanding of Korea’s financial markets and strengthen the connection between the government and markets.   Please refer to the attached files. 

On October 27, the Ministry of Finance and Economy (MOFE), jointly with the Korea Development Institute (KDI), hosted the 2026 G20 Global Financial Stability Conference at the Four Seasons Hotel Seoul.   The conference, attended by approximately 300 prominent figures from the domestic and international economic and financial communities, opened with remarks by Second Vice Minister of Finance and Economy Huh Chang and KDI President Kim Se Jik, followed by keynote addresses from Chief Economist of the Inter-American Development Bank (IDB) Laura Alfaro, and Professor at Princeton University Markus Brunnermeier. The conference featured presentations and discussions across three sessions: (1) Global Economic Resilience and Financial Stability; (2) Financial Stability Risks and Policy Challenges from AI Innovation; and (3) Financial Stability Risks and Policy Challenges from Supply Chain Fragmentation.   In his opening remarks, Second Vice Minister Huh noted that the spread of AI and the restructuring of global supply chains are emerging as new risk factors that could threaten financial market stability. In response, he outlined three policy directions: proactively managing AI-related financial risks, securing fiscal space to prepare for future shocks, and establishing a dual safety net that combines the global financial safety net with supply chain resilience. Finally, ahead of Korea’s G20 presidency in 2028, he reaffirmed the country’s commitment to actively contributing to global financial stability discussions as a member of the G20 Troika* beginning next year and translating cooperation among member countries into tangible outcomes.   * A cooperative framework comprising the previous, current, and incoming G20 presidencies, designed to support the smooth operation of the G20 by ensuring continuity in key agendas and facilitating policy coordination.   In his opening remarks, KDI President Kim pointed to growing uncertainty in financial markets and emphasized the need for countries to share experiences and jointly explore innovative policy ideas and avenues for international cooperation to address emerging risks. He added that KDI would continue to engage in active policy discussions with MOFE, international organizations, and domestic and overseas research institutions to support the development of policy agendas through which Korea could contribute to the G20.   In his keynote address, Professor Brunnermeier noted that the growing adoption of AI is transforming trading and decision-making practices in financial markets while potentially giving rise to market instability and new risks to the financial system. In particular, he highlighted risks such as heightened market volatility stemming from increased AI-driven trading and growing dependence on technology, emphasizing the need to adapt monetary and financial policies and strengthen financial system resilience.   In her keynote address, IDB Chief Economist Alfaro highlighted that global imbalances could pose risks by amplifying financial market volatility. She also stressed the need to take a comprehensive view of corporate ownership structures and international production networks when assessing global imbalances, given the effects of multinational enterprises’ ownership structures and global production activities on trade balances across countries.   During the first session, titled “Global Economic Resilience and Financial Stability,” participants agreed that while the global economy and financial markets have remained resilient amid uncertainty, vigilance is needed regarding potential financial market risks and elevated debt burdens. They pointed out in particular that leverage and liquidity risks could amplify financial market shocks, while high debt burdens in emerging and developing economies could constrain economic growth. Participants discussed policy measures including stronger risk management in the financial system, securing debt sustainability, and pursuing growth-friendly structural reforms.   The second session, titled “Financial Stability Risks and Policy Challenges from AI Innovation,” examined how productivity gains and financial service innovation driven by the spread of AI technology could affect economic growth and financial stability, as well as potential financial stability risks such as excessive expectations surrounding AI investment and cyber risks. Participants also discussed financial supervisory and regulatory measures to strengthen risk management frameworks and enhance financial system resilience in response to vulnerabilities arising from the increasing use of AI by financial institutions.   The third session, titled “Financial Stability Risks and Policy Challenges from Supply Chain Fragmentation,” explored the effects of geopolitical tensions and supply chain restructuring on commodity markets and the real economy. Participants also examined the impact of supply chain shocks on inflation, exchange rates, and government bond yields, and exchanged views on policy responses to economic and financial market uncertainty, including supply chain diversification, stronger capacity to respond to external shocks, and expanded international coordination.   Building on the discussions at the conference, MOFE plans to continue contributing to stronger G20-level policy coordination and international cooperation to strike a balance between AI innovation and financial stability and enhance the resilience of the global financial system. Please refer to the attached files.

The 9th Digital Economy Forum, hosted by the Ministry of Finance and Economy (MOFE) and organized by the Korea Startup Forum, was held at the Grand Hyatt Seoul on October 23.   Held annually since 2018, the Digital Economy Forum brings together experts from the public and private sectors to exchange views on trends, prospects, and policy responses related to the digital economy. This year’s forum was held under the theme “AI for Growth, Growth for All.”   In his opening remarks, First Vice Minister of Finance and Economy Kwon Dae-young emphasized that the time has come for Korea to take the lead in the AI era and outlined three key policy directions for creating new growth engines through AI and promoting inclusive growth.   First, he announced plans to significantly increase the budget for physical AI from KRW 0.9 trillion this year to KRW 3.1 trillion next year to accelerate productivity innovation in manufacturing and robotics. Second, the government will integrate AI into seven SEED projects, including advanced biotechnology, small modular reactors, quantum technology, and aerospace, to identify and foster new growth engines beyond semiconductors. Third, the government will strengthen support for AI education to ensure that no one is left behind in the AI era, while working to narrow disparities across generations, regions, and businesses through housing, employment, and financial policies.   In his welcoming remarks, CEO of the Korea Startup Forum Choi Ji-young highlighted that startups have been at the forefront of digital economy innovation by embracing new technologies and pioneering new markets. He also spoke highly of the global competitiveness and growth potential of Korean startups. Emphasizing the importance of cooperation among the government, academia, and businesses so that the benefits of AI-driven growth can be shared by companies, citizens, and regions alike, he expressed hope that the forum would serve as an opportunity to connect policy with innovation on the ground.   The forum also featured four panel discussion sessions in which experts from the public and private sectors in Korea shared their experiences and discussed possible responses in four areas: (1) enhancing productivity and competitiveness through AI transformation in traditional manufacturing industries; (2) identifying next-generation growth engines beyond semiconductors and fostering emerging industries; (3) responding to changes in the job market in the AI era and strengthening AI capabilities across all generations; and (4) building AI-driven regional innovation ecosystems and developing strategies for regional growth.   This year’s forum also introduced a new AI startup pitching session, providing promising Korean startups using AI in various fields, including manufacturing, biotechnology, and education, with an opportunity to present their innovative technologies and business models and showcase their technological capabilities and growth potential. Going forward, MOFE plans to closely monitor domestic and international developments in AI and the digital economy and actively explore relevant policy measures based on the views shared by experts at the forum. Please refer to the attached files.