[THE INVESTOR] The top financial regulator said on July 27 that Korea is well positioned to tide over the unprecedented Brexit shock and vowed to take appropriate measures to minimize the fallout.

Yim Jong-yong, chairman of the Financial Services Commission, said that volatility in the local financial market may continue to increase over an extended period of time but insisted Britain’s exit from the EU will have limited impact on the global financial market.

“There still exists a possibility that volatility in the global financial market may further expand due to the possible departure of other countries from the EU and various other factors that might emerge in the process of the market shifting to a new balance following Brexit,” he said in an emergency meeting in Seoul.

The meeting was attended by top financial officials, including the heads of the Financial Supervisory Service, the Korea Federation of Banks and the Korea Financial Investment Association.

Yim said the financial watchdog has already devised manuals for dealing with Brexit woes, which he said might include a crash in the stock market and a rise in the outflow of foreign capital.

“The financial authorities will thoroughly review the details and procedures of their contingency plans that are already in place, so such steps can be taken actively and swiftly should a condition that requires such measures take place,” the FSC chairman said at the meeting.

“We will also come up with market stabilization measures in advance and immediately take necessary measures should market concerns exceed a certain level,” he added.

In a separate meeting, the country’s Commerce Ministry also pledged to take all necessary steps, although he insisted the negative impact on the local economy will likely be limited.

“Most experts believe the scope of impact from Brexit on our exports, investment and trade will remain limited throughout various stages of the process when considering the volume of trade and investment between Korea and Britain, as well as the time needed to negotiate Britain’s exit from the EU,” said Joo Hyung-hwan, minister of trade, industry and energy.

In 2015, Korea’s exports to Britain came to US$7.39 billion, only accounting for 1.4 percent of the country’s overall outbound shipments, according to the trade ministry. Foreign investment from Britain into Korea also accounted for only 1.2 percent of the total.

“The government will take active measures to make sure that our firms will not face any unnecessary difficulties in exporting their goods to Britain or invest in the country,” Joo said in a meeting with business leaders that was originally designed to discuss new growth engines, according to the ministry.

Joo added the ministry was also operating a special team to monitor the possibility of growing uncertainties in the financial market taking a toll on the real economy, especially exports.

(theinvestor@heraldcorp.com)