The head of South Korea’s Financial Supervisory Service (FSS), Lee Bok-hyun, joined top global financial leaders in Basel, Switzerland, on Monday. He took part in an important meeting of the Basel Committee on Banking Supervision to talk about new global banking rules and how climate change is affecting the financial system.
Lee joined the Governors and Heads of Supervision (GHOS) meeting, which is the highest decision-making group within the Basel Committee. The meeting included leaders from major global financial agencies and central banks.
The meeting focused on the progress of Basel III rule implementation and the growing risk climate change poses to the banking sector.
What is Basel III and why it matters
Basel III is a global set of rules created after the 2008-2009 financial crisis. These rules help banks become safer and better prepared for financial risks. They guide how much capital banks should hold and how to measure credit and operational risks.
The rules are meant to protect the global financial system. Many countries, including South Korea, have agreed to adopt and apply them. During the meeting, leaders reviewed how different countries are doing with putting these rules into action.
They also discussed how to improve the system as the world faces new challenges, such as inflation, digital currency, and geopolitical tensions.
Climate change and financial risks
Another important topic was climate change. The meeting focused on how extreme weather, rising sea levels, and other environmental issues affect banks and their customers.
For example, banks that lend money to companies affected by floods or wildfires may face losses. Regulators discussed how banks should measure and manage these risks.
The Basel Committee is planning new guidance to help banks understand and respond to climate-related financial threats.
Lee Bok-hyun shared South Korea’s efforts to prepare its banks for climate-related challenges. The Financial Supervisory Service has been encouraging local banks to include environmental risk in their planning and lending decisions.
South Korea’s role in global banking
South Korea plays an active part in global financial discussions. By joining meetings like this one in Basel, the country helps shape the rules that affect banks around the world.
The Financial Supervisory Service has also worked with other global groups, such as the International Monetary Fund and the Financial Stability Board. These partnerships help South Korea improve its financial system and stay up to date with global trends.
Lee Bok-hyun has recently attended several global financial events. In past months, he met with key officials from the U.S. Federal Reserve and the European Central Bank to talk about how to manage financial risk and keep banks strong.
The road ahead for Basel III
The Basel Committee will continue to check how countries are applying the Basel III rules. More updates are expected in the coming months.
South Korea will remain involved in these talks. At the same time, the Financial Supervisory Service will keep checking on local banks to make sure they follow international standards.
This ongoing effort helps the banking system stay strong during global financial stress. It also makes banks more prepared for future economic or environmental shocks.
Key facts at a glance
Who: Lee Bok-hyun, head of South Korea’s Financial Supervisory Service
What: Attended GHOS meeting of the Basel Committee
Where: Basel, Switzerland
When: Monday (earlier this week)
Why: To discuss Basel III rule progress and climate-related risks
How: Through collaboration with global financial leaders
