The South Korea Financial Services Commission reviewed the effects of rising domestic and global interest rates and directed authorities to maintain active deployment of market stabilization programs, with preparations to expand support quickly if bond market volatility becomes excessive. The review found that equity and foreign exchange volatility had recently eased and corporate bond spreads remained well below past crisis levels, but warned that higher funding costs and an unexpected credit event could rapidly transmit refinancing stress from vulnerable sectors to financial institutions. The three-year government bond yield reached 4.011%, up 105.8 basis points in 2026, while the corporate bond spread rose 16.9 basis points to 69.2 basis points. The KRW 100 trillion-plus stabilization framework readied in response to the Middle East conflict has purchased KRW 12.1 trillion of corporate bonds and commercial paper since March. Authorities will assess fourth-quarter bank and credit finance company bond issuance and maturity concentrations, alongside financial institutions’ asset quality, liquidity capacity and funding structures. The commission also called for continued monitoring of maturity mismatches, concentrated funding flows, vulnerable borrowers’ repayment burdens and uncertainty in the artificial intelligence and semiconductor sectors. Previously announced support for vulnerable borrowers is to proceed, with supplementary measures to be prepared if needed, while market monitoring meetings will be held periodically.

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