Published on March 25, 2026
Kwon Dae-young, vice chairman of the Financial Services Commission (FSC), highlighted the potential for South Korea to take advantage of the current energy supply volatility caused , particularly due to the ongoing conflict in Iran. Speaking at the 2026 Korea Economic Forum (KEF) on Wednesday, Kwon emphasized the importance of diversifying energy imports and investing in domestic alternative energy sources.
“The current shock differs from those in the past, beset on top of the intense tech rivalry with once well-integrated global supply chains being fragmented,” Kwon stated. His comments came during an address on Korea’s financial policy agenda, attended 170 diplomats and corporate leaders at the Westin Josun Seoul.
Kwon underscored that a sustainable energy structure is crucial for the country’s future, noting that approximately 70 percent of Korea’s crude oil and half of its naphtha imports transit through the Strait of Hormuz. He asserted that the crisis should be framed as an opportunity for Korea to diversify its energy sources, boost reserves, and expand alternative energy initiatives, including solar, wind, and nuclear power.
In his address, Kwon assured attendees that turmoil in the real economy would not necessarily impact the financial sector adversely. He pointed to the recent performance of the Kospi, which has rebounded past the 5,500 mark after dropping into the low 5,000s in the wake of the Iran conflict that began in late February. “Rather, the financial sector’s resilience could help support the real economy, creating a mutually reinforcing system,” he added.
Reinforcing the government’s commitment to enhancing the capital market, Kwon spoke about plans to implement a two-tier structure for the tech-heavy Kosdaq. This initiative is designed to improve market screening and differentiate between higher-quality companies and smaller enterprises.
“Currently, a company with a market capitalization of 20 trillion won ($13.3 billion) and one worth 200 billion won are included in the same index, which weakens its screening function,” Kwon explained. “Our goal is to clearly separate higher-quality companies from so-called penny stocks.”
He elaborated on the plans for a more defined index to serve as a benchmark for index funds, which is anticipated to attract increased capital inflow into Korea. While acknowledging that the lower-tier companies are not inherently weak, he described them as firms currently in a growth phase.
The two-tier system was discussed at a conference chaired Jae Myung on March 18, where FSC Chairman Lee Eog-weon shared intentions to segment the market into two categories: mature, innovative companies and growth-stage firms capable of transitioning between tiers to enhance market competitiveness.
Historically, the Kosdaq had risen 35 percent last year and an additional 22 percent this year, while the Kospi reported a 76 percent increase last year and a 31 percent climb in 2026.
Kwon also discussed Korea’s aspirations for inclusion in the Morgan Stanley Capital International (MSCI) Developed Markets Index. He noted that the government is nearing completion of all necessary requirements set , which includes implementing 24-hour foreign exchange trading, mandatory disclosures in English, and improvements to dividend procedures. “The inclusion is expected to generate a greater inflow of higher-quality capital,” he asserted.
In his opening address, Park Chang-hee, CEO of the JoongAng Ilbo and publisher of the Korea JoongAng Daily, stressed the critical need for transparent communication between the government and vital stakeholders during times of market instability induced conflict. “In times of such financial uncertainty, what matters is not only policy, but also how clearly the government communicates with key stakeholders, including foreign envoys,” he said.