A Vision for Korean Capital Markets

By: Sohn Byungdoo, Chairman & CEO, Korea Exchange (KRX) Apr 2021

Name: Sohn Byungdoo

Title: Chairman & CEO, Korea Exchange (KRX) 

1. What was the journey that brought you to KRX as Chairman & CEO and where do you plan to take the exchange next?  

Prior to joining Korea Exchange (KRX) as Chairman & CEO, I had the privilege of serving as Vice Chairman at the Financial Services Commission (FSC), Korea's primary policy-making and regulatory authority. Before the FSC, I've held various leadership & senior roles at the Ministry of Economy and Finance (MOEF), the IBRD and the Presidential Chief Economic Secretary's Office.  

As the sole regulated exchange in Korea, KRX is a vital financial hub in the domestic economy. I am proud and inspired by the way our company has risen to this challenge thus far. However, as we strive to be a global market infrastructure provider, there are business opportunities that hold potential and have yet to be explored. In this regard, I aim to sharpen our organization’s ability to anticipate global clients' changing needs and acknowledge relevant stakeholders rising expectations. Such developments will allow KRX to both maintain stable growth amid ongoing uncertainty and lead the change. 

2. What is KRX's greatest opportunity now? 

A favourable macro backdrop and accommodative policies have created a conducive environment for KRX's growth this year. Factors like the unchanged monetary policy, the reduction in the stock transaction tax rate, and the mobilization of government-private joint funds for growth sectors are all strong opportunities that will help us attract a solid investor base. Nonetheless, greater opportunity with significant potential often comes with risk and uncertainty. Technology innovation and subsequent regulatory changes usually allow us to examine our market structure from a challenge perspective. However, when properly addressed, such uncertainty also helps us develop a better understanding of our unique strengths. To this end, the KRX's greatest opportunity would come from critical challenges stemming from the global scene. And I trust to make the most out of it by securing our core strength, adding businesses complementary to the market operation, and providing new products or assets classes.  

3. What has the pandemic taught us about exchanges and financial markets? 

During the COVID-19 pandemic, the FSC, alongside other policymakers, had rolled out a series of financial support packages when most asset classes have sought safety. Markets responded to the fiscal packages and rebounded as they addressed drivers of macroeconomic slowdown, with a focus on SMEs and hard-hit industries. In parallel to the government's effort, KRX and global exchanges also assumed critical roles and remained remarkably resilient. Markets introduced measures such as circuit breakers and restrictions on short-selling, keeping trading venues orderly and liquid. CCPs also remained fully operational through record high volumes and volatility, serving as a safeguard against potential settlement failures. 

There has been a broad agreement that policymaker's regulatory changes were well-coordinated across their relevant domestic market participants. But considering the speed with which crisis unfolds, there is always a possibility that minor differences in policy adjustments between countries could bring an undue burden on market participants. Therefore, while policymakers & regulators remain vigilant with the risks to financial stability, it will be the exchange’s role to actively voice market participant’s views and continue coordinating financial stability policy across countries. 

4. What are the challenges you would like to share and how does that experience influence your leadership? 

I find my work experience related to the international financial policy field, especially challenging yet very rewarding. As a financial policymaker, I was seldom exposed to situations where relevant stakeholders had to make tradeoffs and choose what is deemed as the least bad option. Such situations were significantly challenging because they required a discourse process that demanded endless integration of varied thoughts of how our actions increase or mitigate financial risk. In retrospect, it is those periods that enabled me to deliberate the virtues of leadership. The experience has helped me develop a deep understanding of the interdependencies within the organization, build productive relations with stakeholders, and initiate changes towards organic growth.