[Overview] Unofficial translation

[Overview] Unofficial translation

6 5 Financial Stability Index (FSI) ) Global financial crisis 6 5 Crisis stage Warning stage 8 8 9 5 6 Nov.6 Note: ) Calculated by standardizing monthly real and financial sector indicators which affect financial stability conditions. The FSI is measured based on values between and, and the closer it comes to the higher the level of instability. <Asian financial crisis (998.)=> [Financial Stability Conditions]. Credit Markets Private credit-to-nominal GDP ) ratio and gap )) Long-term trend (LHS) (%) Asian financial crisis (Nov 997) 8 6 Ratio (LHS) Gap (RHS) <Household gap> (%p) +.8 Lehman Brothers collapse (Sep 8) - Q Q 6 <Corporate gap> - 99 9 97 6 9 5 Q 6 - -.5 - Q Q 6 Notes: ) Sum of nominal GDPs in quarter concerned and in immediately preceding three quarters ) Difference between private credit/nominal GDP ratio and its long-term trend ) Estimated figures for Q 6 ) A single index made through a synthesis of major indices related to financial stability, the FSI is used more as a measure for judging current financial stability conditions than expected ones. The critical threshold Warning and Crisis stages are calculated through the noise-to-signal ratio approach, at 8 and respectively. For further details, please refer to the April Financial Stability Report, <Box IV-> Outline of Financial Stability Index (FSI) (p. 8).

Household debt ) -related indicators,5,, 9 (trillion won) (%) Amount (LHS) 5 8 Rate of increase ) (RHS) 6 9 6 (%) (%) Household debt-todisposable income ratio ) (LHS) Financial debt-to-financial ) assets ratio (RHS) 6 55 5 7 5 5 Q Q Q 6 Q Q Q 6 Notes: ) Household credit statistics basis ) Year-on-year ) Disposable income for Q to Q 6 estimated using the ratio of household disposable income to GNI (average for preceding three years) ) Based on flow of funds statistics; estimated figure for Q 6

Corporate interest coverage ratios, )) and rates of growth in corporate bond issuance balance and deposit-taking banks corporate 8 loans ) <Interest coverage ratio> <Rates of corporate credit growth> Interest coverage ratio (LHS) (%) 8 6 (%) (%) Corporate bonds 6 5 Stock price volatility indices V-KOSPI VIX ) 5 6 Proportion of firms with ratios ) below (RHS) 6 8 Deposit-taking bank corporate loans 8 5 6 - -8 - -8 5 Q 6 Notes: ) Operating income / interest expenses ) First half basis ) Year-on-year ) Including firms with operating losses Sources: The Bank of Korea, KIS-Value, Banks business reports. Asset Markets Jan. Jul. Jan.5 Jul.5 Jan.6 Jul.6 Nov. Note: ) Volatility index calculated with prices for options on S&P 5 index Source: Bloomberg Price-to-book ratio (PBR) Major country s PERs ) and PBRs )..... (times) Korea India 5 5 Price-earnings ratio (PER) (times) US China Thailand Austrailia Japan Germany UK Notes: ) MSCI, end-november 6 basis ) End-November 6 basis Sources: Bloomberg, Thomson Reuters

Corporate bond credit spreads, ) and spread across credit ratings 8 (bp) Corporate bonds (A-) - Corporate bonds (AA-) (LHS) Corporate bonds (A-) - Treasury bonds (LHS) (bp) 6 Corporate bonds (AA-) - Treasury bonds (RHS) 8 6 8 Jan. Jul 7 Jan.5 Jul 7 Jan.6 Jul 7 Nov Note: ) -year maturity basis Source: Korea Financial Investment Association BOK Base Rate, Korean and US Treasury bond yields (%) ) Treasury bond (-yr) yield volatility Treasury bond (-yr) yield (%) US Treasury (-yr) yield BOK Base Rate Jan. Jul 7 Jan.5 Jul 7 Jan.6 Jul 7 Nov Note: ) Daily volatility calculated based on exponential weighted moving average (EWMA) Sources: Korea Financial Investment Association, Bloomberg

. Housing purchase price rates of change, ) and transaction volumes ) Nationwide Seoul and surrounding areas Provinces (%) Provinces (%).6.6 (, transactions). Seoul and surrounding areas - average (, transactions) 6 New apartment sales, and quantities completed ) (, units) (, units) New apartment sales Yearly average quantity completed between 5 and Construction completed 6.. 8 6 : 69 thousand 8 6 5: 7 thousand units -. -. Jan. Jul Jan. Jul Jan. Jul Nov 5 6 6 Notes: ) Compared to previous months ) January to October basis Source: Korea Appraisal Board e e e 5 6 7 8 9 Note: ) 7-9 based on scheduled quantities Source: Real Estate

Commercial real estate vacancy rates and rental price indices ) <Vacancy rates> <Rental price indices> (%) (%) 5 5 Offices Shops Offices Shops 9 9 6 6 97 97 Q Q 5 Q 6 Q. Q Q.5 5 Q Q.6 6 Note: ) Q 5 = Source: Korea Appraisal Board 99 98. Financial Institutions 99 98.5..5. Commercial bank profitability and asset soundness (%) ) Return on assets (%) ) Substandard-or-below loans Net interest margin.5..5..5.5. Q. Q. Q. Q.5 Q.6 Q. Notes: ) Accumulated quarterly incomes annualized ) End-period basis Source: Banks business report

8 7 6 5 NBFI share ) and rate of increase in total assets ), and returns on assets (ROAs) ) <Assets> (%) (%) NBFI share (LHS) 5 NBFI rate of total asset growth (RHS) 6. 8.6 5 Q Q 5 Q 6 9 7 <ROAs> (%) (%) Insurance cos. Mutual credit cooperatives Securities cos. Credit-specialized financial cos. Savings banks - - - Q Q 5 Q 6 Notes: ) Relative to total financial institution assets ) Year-on-year ) Net income / average total assets over the past one year period Sources: Financial institutions business reports Volume of asset and liability interconnectedness across financial business sectors )) 5 5 5 (trillion won) (%) Interconnected volume (LHS) Share in total assets of interconnected volume (RHS) 5 5 5 Q 6 Notes: ) Sum of amounts of funding among financial institutions through marketable financial products such as financial debentures, RPs, CDs, CP, etc. ) Period-end basis Sources: Estimations made using financial institutions business reports, Korea Securities Depository data, Flow of Funds statistics, etc.. Capital Flows 5 8. 5 9 7

6 Changes in foreigners portfolio investment funds ) ( million dollars) ( million dollars) 6 - - Stocks Bonds Total -6-6 Jan. Jul Jan.5 Jul Jan.6 Jul Nov Note: ) A + means net inflow, and a - net outflow.

9 Changes in residents overseas portfolio investment ) ( million dollars) ( million dollars) Stocks Bonds Total 9 6 6 - - Jan. Jul Jan.5 Jul Jan.6 Jul Oct Note: ) A + means net investment, and a - net withdrawal. 7 Indicators of commercial bank loss absorption capacities ) (%) (%) ) BIS total capital ratio (LHS) BIS total capital ratio requirement (LHS) ) Provision coverage ratio (RHS) 6 8 [Resilience] 8 8% 8.65%. Financial Institutions 5 Q. Q Q Q 5 Q 6 Q Notes: ) End-period basis ) Basel II-based before Q, and Basel III-based after Q ) Loan loss provisions (including loan loss reserves) / substandard-or-below loans Sources: Commercial banks business reports

NBFI capital adequacy ratios )) 5 (%) Q Q 5 Q 6 (%) Q 6 Q 6 6 External payment capacity indicators 5, ( million dollars) (%) Net external assets (LHS) 6 5, Short-term debt / foreign exchange reserves (RHS) Mutual credit cooperatives Credit-specialized financial cos. Savings banks Insurance cos. Securities cos. (LHS) (LHS) (LHS) (RHS) (RHS) Notes: ) Insurance companies risk-based capital ratio (supervisory requirement %), mutual credit cooperatives net capital ratio (%; community credit cooperatives %; NongHyup 5%), securities companies net capital ratio (%; previously, net operating capital ratio 5%), credit-specialized financial institutions adjusted-capital ratio (7%; credit card companies 8%), savings banks BIS capital ratio (6%; companies with assets over trillion won 7%) ) Dotted lines show the supervisory standards (in the case of securities companies, the net capital ratio was applied from 6) Sources: Financial institutions business reports,, Q Q Q Q 5 Q 6 Q. Financial Market Infrastructures. External Payment Capacities

5 5 5 Retail payment and foreign exchange settlement system-related indicators (cases) Frequency of net debit cap utilization rates exceeding 7% (LHS) Proportions of foreign currency settlements made using CLS system (RHS) (%) 8 76 7 68 Q Q Q Q 5 Q 6 Q 6