The International Monetary Fund said it was unable to carry out an independent stress test to assess the country’s financial market stability due to the lack of available government data.

While the IMF showed positive evaluation on Korea’s handling of the global financial crisis by “robust policy measures,” the international body also lashed at the Korean financial authorities for not turning in raw data that were requested to assess the country’s financial stability.

“The (IMF’s) Financial Sector Assessment Program team was unable to carry out an independent stress test due to the unavailability of publicly available data,” the IMF said in a report, alleging the Korean financial authorities did not provide the supervisory data.

“As a result, the international organization had to carry out the stress test based on the data that were collected from the individual banks. The unavailable data were to be used in assessing the solvency and liquidity risks for the bank and nonbank sectors,” the report added.

The IMF team’s remark sparked a transparency dispute about the Korean financial regulator.

The Financial Supervisory Service, however, contested that the current law bans the transfer of individual raw financial data.

“It is not legally compulsory for us to submit the raw financial data, such as an individual’s loan data, to the (IMF’s) FSAP team, and doing so could breach our information protection duties,” an official of the FSS bank supervisory unit said.

The FSS also claimed that the IMF sufficiently accounted for the FSS’ analysis model to verify the credibility of the submitted information. “It has been a norm for other countries, too, to turn in the data in the form of a final analysis report, based on their collection of the data from the local financial institutions.”

In another report on Korea’s financial crisis management, the IMF suggested two corrective actions: Making more proactive and timely intervention before banks breach regulatory thresholds and “putting in place norms and guidance determining the use of the powers to postpone or suspend corrective actions.”

By Chung Joo-won (joowonc@heraldcorp.com)