United States of America BOK Governor Barkin Richmond remarks U.S.

# United States of America
BOK Governor Barkin Richmond remarks U.S. Federal Reserve should be patient in cutting interest rates, noting that if inflation continues to fall and begins to spread into several categories, it's a sign it's looking for to normalize interest rates.

Moody's said it downgraded the long-term rating of New York Community Bancorp and its subsidiary Flagstar Bank to "Ba2" by two notches. NYCB's unexpected losses, earnings hits and capital declines related to its New York office and multifamily properties are the reasons for the downgrade.

U.S. Fed Director Coogler commented that while the progress of disinflation so far is satisfactory, the FOMC's mission is not over yet. In response, he emphasized to remain focused until inflation returns sustainably to the 2% target.

# China
The Chinese government will unveil its opinion on supporting the healthy development of trade cooperation for new energy vehicles, in which both central and local governments and central banks will participate to support trade in new energy vehicles (electric vehicles, hybrid vehicles, and hydrogen vehicles). List 18 policies and ministries responsible for each category, including encouraging overseas research and development (R&D) and strengthening cooperation with overseas companies in China.

# Korea
Deputy Prime Minister Choi Sang-mok met with Japanese economists and stressed that he would come up with a corporate value-up program to address the undervaluation of the Korean stock market. "We will focus on three pillars: enhancing shareholder value, establishing fair market order and expanding demand base," he said. "We will prepare a corporate value-up program in February to spread a culture of respect for shareholder value."

The Fair Trade Commission said it will consider whether there is an alternative to the pre-designation system in consideration of market reaction to the bill on promoting fair competition on platforms. However, it emphasizes that the platform law is not repealed.

# Other
European Central Bank Executive Director Schnabel said recent economic indicators require patience before the ECB begins cutting interest rates. It means we have to be patient and cautious because we know from historical experience that inflation could flare up again, he added.

The Kyushu Economic Research Association said that Taiwan's TSMC will build an additional plant in Kyushu, Japan, which is expected to generate 180 trillion won worth of economic effects related to semiconductors over the next 10 years. TSMC announced on the previous day that it would build a second plant in Kumamoto Prefecture, and plans to start mass production between October and December this year.

# economic indicators
Germany industrial output -1.6% month-on-month in December (-0.5% expected, -0.7% in November)

China's January foreign exchange reserves of $3.219 trillion (expected $3.217 trillion, December $3.238 trillion)

[Daeshin Securities Investment Strategy/Market Telegram Channel] The world changed by COVID-19, the daily life of telecommuting.
The result is the collapse of commercial real estate. What about REITs ㅜ.ㅜ

~ U.S. Treasury Secretary Janet Yellen said several financial institutions will be under considerable stress, saying she is concerned about a slowdown in U.S. commercial real estate. As a result, U.S. regional bank New York Community Bank (NYCB), whose stock price has plunged due to poor commercial real estate loans, saw its stock price plunge by more than 20%.

Secretary Yellen appeared before the House Financial Services Committee of the U.S. Congress and said he was "worried" when asked by Democratic Congressman Emmanuel Cleaver (Missouri) about commercial real estate.

"Composite factors will put a lot of stress on these (commercial) real estate owners," he predicted. In the meantime, he pointed out that high interest rates, rising vacancy rates due to the spread of telecommuting after the pandemic, and the size of commercial real estate loans due this year.

However, it is predicted that the commercial real estate problem will not spread to risks in the financial sector as a whole.

"Although some institutions are under considerable stress over this issue, I believe it is manageable," Yellen said. "Banking regulators are focusing on this issue and making sure that lenders have sufficient reserves and liquidity." However, he did not specify which financial companies are increasing their risk of insolvency.

As Yellen's remarks raised concerns, NYCB shares plunged 22.22 percent to close at 4.2 U.S. dollars per share. This is the lowest level since 1997. Another negative factor was the fact that some shareholders filed a lawsuit against NYCB, claiming that it concealed the insolvency of commercial real estate loans. The bank's stock price has plunged 60 percent since April 31, after it was found that it suffered 185 million dollars in losses from two commercial real estate loans. Its market capitalization has evaporated 4.5 billion dollars (5.99 trillion won).

With the prolonged slump in the U.S. commercial real estate market, insolvency in the financial sector, which has been feared, has recently begun to become visible. As commercial real estate owners are unable to repay their loan principal and interest due to a hike in the benchmark interest rate and a rise in office vacancy rates, banks are dealing with losses in related loans. According to JPMorgan, small and medium-sized banks hold 28.7% of U.S. commercial real estate loans, and there are concerns that they will be more vulnerable to loan insolvency and will also have a greater impact as capital regulations are relatively low compared to large banks.

The U.S. commercial real estate slump is spreading to Asia and Europe. Japan's Aozora Bank and Switzerland's Julius Baer Bank suffered massive losses due to U.S. commercial real estate loans, leading to the resignation of their CEO.