South Korea’s Financial Services Commission has published its annual work plan for 2025, setting market stabilisation as the top priority while also targeting stronger support for livelihoods and continued financial-sector innovation. The plan is structured around three goals: safeguarding market stability and supporting the real economy, facilitating a recovery in people’s livelihoods, and adapting to change through innovation. On market stability, the agenda includes continued operation of market stabilisation programmes of about KRW100 trillion, the introduction of a financial stability account for financial companies, upgrades to the recovery and resolution regime, and a proposal to raise the deposit protection limit to KRW100 million from KRW50 million. Household debt policy focuses on keeping growth within annual GDP growth via enhanced debt service ratio rules, alongside regulatory changes for real estate project finance loans including stronger equity capital requirements for developers. For real-economy support, policy funding is set to expand to KRW247.5 trillion, with KRW136 trillion allocated to five strategic sectors and more than 60 percent of policy funds frontloaded in the first half of 2025. Livelihood measures include prompt rollout of bank-led debt workout support of about KRW600 billion to KRW700 billion annually for self-employed borrowers who are not delinquent, expanded eligibility for the New Start Fund for overdue borrowers, and an increase in microfinance supply to KRW11 trillion from KRW10 trillion, alongside steps to lower card transaction fees for merchants, require payment gateway services to separately manage unsettled funds, and improve early loan repayment charges. The plan also links enforcement against illegal private lending to the revised Credit Information Use and Protection Act scheduled to take effect from July 2025. On innovation, the FSC plans to ease financial holding companies’ investment limit on fintech businesses to 15 percent from 5 percent, enable person-to-person card payments, pursue elderly-focused insurance reforms, advance capital market and corporate value-up measures including tax incentives and stronger shareholder protections, introduce a mandatory bid rule in M&A, overhaul electronic financial services regulation, build a digital financial security legal framework, and update AI use guidelines.

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