On November 6, Deputy Prime Minister and Minister of Finance and Economy Lee Hyoung Il convened a Market Situation Review Meeting[1] with relevant authorities at the Government Complex Seoul to review domestic and global financial market developments following the U.S. midterm elections and discuss policy responses.

Participants expressed serious concern over heightened volatility in global stock markets following the U.S. midterm elections, as U.S. stocks also fell sharply overnight, particularly technology shares, following a steep decline in Korea’s stock market the previous day. However, they agreed that the recent stock market declines reflected a combination of factors, including policy uncertainty surrounding the AI industry, such as concerns over regulations on AI data centers, and weakening global investor sentiment. They also noted that Korea’s stock market appeared to be reacting excessively to these external factors.

Participants agreed that Korea’s economic fundamentals remain stronger than ever, given projections of economic growth in the mid-3 percent range this year, exports reaching USD 1 trillion and corporate operating profits exceeding KRW 900 trillion. Against this backdrop, they emphasized the need to guard against excessive pessimism driven by heightened market anxiety.

Relevant authorities agreed to continue monitoring developments in the global semiconductor industry and policy trends in major economies. They also pledged to maintain the highest level of vigilance, closely monitor domestic and global stock markets and capital flows in real time, and respond proactively to prevent further market instability.

First, to prevent market volatility from being amplified by excessive forced selling following sharp stock price declines, the authorities decided to waive the requirement for securities firms to maintain a 140 percent collateral ratio on margin loans for three months, effective November 9. Second, the authorities agreed to closely monitor excessive market anxiety and one-sided trading flows, while preparing additional market stabilization measures should volatility increase further. Third, they agreed to continue policy efforts to fundamentally improve Korea’s capital markets, including enhancing corporate value and confidence in the capital markets.

Please refer to the attached files.