The country's financial regulator called on financial firms on Thursday to enhance their risk management amid the escalating Middle East crisis, although the impact of the geopolitical risk on the domestic financial sector has been limited so far. The U.S. and Israel-led war against Iran has been triggering severe market volatility, but its impact on the financial firms here has been curbed due to little exposure to the oil-rich region. So far, their financial soundness and liquidity levels have been relatively solid despite a surge in bond yields and the falling Korean won to the U.S. dollar, according to the Financial Services Commission (FSC). Six domestic banks' exposure to the Middle East region was tallied at 4.3 trillion won ($2.86 billion), which account for a meager 0.3 percent of their risk-weighted assets, the regulator said. But the FSC said financial firms need to bolster their risk management should the war be protracted because it could have a grave impact on the real economy and the financial sector.