Financial Services Commission to Ease Soundness Regulations for Rapid Support of COVID-19 Damage

Emergency Financial Situation Room Activated

Eun Sung-soo, Chairman of the Financial Services Commission, is presiding over a situation review meeting related to COVID-19 response at the Government Seoul Office Building on the 22nd. (Photo by Financial Services Commission)

[Asia Economy Reporter Kim Hyo-jin] On the 22nd, the Financial Services Commission (FSC) announced that it held a situation review meeting related to the novel coronavirus infection (COVID-19) chaired by Chairman Eun Sung-soo and decided to review measures to relax soundness regulations to ensure that funds can be quickly injected into companies affected by COVID-19.

This decision was made considering that the soundness regulations on financial companies are strongly pro-cyclical, acting as a constraint that makes it difficult to respond flexibly during crises.

The Financial Stability Board (FSB) recommended on the 20th in a statement to exercise flexibility within the current international standards framework to provide financial accessibility to households and companies facing difficulties due to COVID-19 and to use capital and liquidity appropriately.

The FSB is an organization involving the Group of Twenty (G20) countries that promotes financial regulatory reforms for global financial system stability through developing international standards and policy recommendations, monitoring the implementation of international standards, and strengthening inter-country cooperation.

Meanwhile, the FSC decided to operate an Emergency Financial Situation Room to respond swiftly to the emergency situation related to COVID-19.

The Emergency Financial Situation Room will be operated as a temporary organization for comprehensive and proactive identification of various risks and monitoring the implementation status of policies. The head of the Financial Innovation Planning Group will serve as the director.

The Emergency Financial Situation Room plans to monitor the implementation status of various COVID-19 related support measures, including the 50 trillion won 'Livelihood and Financial Stability Package Program' for self-employed and small business owners, and support the prompt resolution of field difficulties.

The financial authorities plan to deploy as many available personnel as possible, focusing on mid-level managers with practical crisis management experience, to the Emergency Financial Situation Room for both internal and external use.

They also plan to operate continuous communication channels by organically linking with on-site inspection personnel from the Financial Supervisory Service, experts from policy financial institutions, financial associations, and financial market experts.

Provided by the Financial Services Commission

This content was produced with the assistance of AI translation services.