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The KDIC has made efforts to strengthen the risk surveillance of insured financial institutions to enable early detection of risks and prevent the occurrence of an insurance contingency.
The KDIC has the Ongoing Risk Surveillance Council in place, which is responsible for overseeing, coordinating and assessing risk monitoring activities. In order to adequately monitor the risk profile of insured financial institutions, the KDIC has designated staff to different financial sectors or insured institutions to conduct risk surveillance on an on-going basis. From information gathered from these activities, risk indicators for each sector or institutions were developed. Regular review meetings were held to identify risk factors in the financial market and the routes of risk contagion.
For financial institutions that have been found to be in financial trouble as a result of the ongoing risk surveillance or risk model analysis, the KDIC conducts examinations jointly with the Financial Supervisory Service. The targets for the examinations are selected through a careful analysis of major financial indicators. After conducting joint examinations with the Financial Supervisory Service, the KDIC urges the management of the concerned financial institutions to improve their management practices.
To enhance cooperation among relevant agencies and reduce the administrative burden on financial institutions, a revised Memorandum of Understanding (MOU) on the Sharing of Financial Information were signed by five public agencies - the Ministry of Strategy and Finance, Financial Services Commission, Bank of Korea, Financial Supervisory Service and the KDIC - on September 15, 2009. Under the revised MOU, the scope of information to be shared with the Bank of Korea and the Financial Supervisory Service was further expanded.