South Korea’s financial regulator urged officials to take a tougher stance against false rumors that cause confusion in markets, which remain jittery after the collapse of Silicon Valley Bank and Credit Suisse Group AG.
(Bloomberg) — South Korea’s financial regulator urged officials to take a tougher stance against false rumors that cause confusion in markets, which remain jittery after the collapse of Silicon Valley Bank and Credit Suisse Group AG.
“In a situation where financial-market instability factors still exist around the world, the spread of malicious rumors can cause great damage to the national economy, including financial-market instability and the soundness of financial companies,” Financial Services Commission Chairman Kim Joo-hyun said in a weekly meeting with senior officials on Friday, according to an emailed statement from the regulator.
Kim instructed officials to actively respond in consultation with organizations such as prosecutors and the police to take legal measures if needed against those who spread false rumors.
His comments came amid speculation that two unlisted lenders — Welcome Savings Bank and OK Savings Bank — were suffering losses. Rumors spread this week through mobile messages that the banks were preparing to suspend deposit withdrawals because of an alleged 1 trillion won ($771 million) in losses from project financing, urging customers to withdraw deposits.
The Financial Supervisory Service, South Korea’s financial watchdog, called the rumors about the two banks “groundless” and said the lenders are expected to post net income in the first quarter.
Welcome Savings and OK Savings both issued statements saying the rumors are untrue and their financial status is sound.
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