President Moon to Inject 100 Trillion Won in Emergency Corporate Rescue Funds (Comprehensive)

2nd Emergency Economic Meeting, Measures to Stabilize Financial Markets Amid COVID-19... "We Will Definitely Prevent Corporate Bankruptcies"

[Asia Economy Reporters Ryu Jeong-min, Kim Hyo-jin, Son Seon-hee] On the 24th, President Moon Jae-in held the '2nd Emergency Economic Meeting' at the Blue House and stated, "We will definitely prevent companies from going bankrupt," announcing, "We have decided to inject 100 trillion won worth of emergency corporate rescue funds."

Along with this, to resolve the temporary liquidity crisis faced by sound companies due to financial market instability, he said, "We will organize a bond market stabilization fund worth 20 trillion won," adding, "We will intervene not only in corporate bonds but also in commercial papers to support short-term funding demand."

In particular, President Moon emphasized, "There will never be a case where a normal company closes due to temporary liquidity shortage." He explained, "This is an urgent support that expands beyond small business owners and SMEs to key industry companies, providing meticulous support including both non-prime and prime companies." This is a preemptive measure to protect our companies and an extraordinary measure to safeguard jobs.

[Image source=Yonhap News]

This emergency infusion is aimed at employment stability. President Moon said, "The reason the government is swiftly supporting companies in difficulty is ultimately to stabilize employment," and urged, "Applications for employment retention subsidies from struggling companies are increasing explosively, so please actively consider significantly expanding the employment retention subsidy."

He also mentioned the deferral and exemption of public charges such as the four major social insurance premiums and electricity bills. At the 3rd Emergency Economic Meeting scheduled for next week, effective livelihood support measures will be prepared.

Meanwhile, major commercial banks, after practical discussions with financial authorities, have decided to provide 3.5 trillion won worth of second compensation loans at ultra-low interest rates (1.5%) to small business owners and others starting early next month.

The extension of loan maturities and deferral of interest payments for small business owners and others will be expanded to all financial sectors starting from the 1st of next month. Previously, on the 23rd, Financial Services Commission Chairman Eun Sung-soo and heads of 19 banks held a signing ceremony at the Bankers' Hall in Jung-gu, Seoul, pledging active cooperation on these matters.

[Image source=Yonhap News]

President Moon explained, "We actively support the purchase of corporate bonds and sufficiently support liquidity in the short-term funding market, expanding the initial plan of 6.7 trillion won by an additional 11.1 trillion won." In addition, a securities market stabilization fund worth 10.7 trillion won will also be activated. This is 20 times larger than the 500 billion won fund during the 2008 global financial crisis.

The meeting was attended by Lee Ju-yeol, Governor of the Bank of Korea; Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance; Noh Young-min, Chief Presidential Secretary; heads of financial authorities; key economic ministers; and Blue House aides. The Blue House devised a financial market stabilization solution related to COVID-19 based on an all-out response system.

First, an additional 29.1 trillion won in operating funds will be provided to mid-sized companies. Guarantee supply will be expanded to 7.9 trillion won, and an additional 21.2 trillion won in loans will be provided through policy financial institutions. The bond market stabilization fund will also be organized at a scale of 20 trillion won.

This doubles the originally prepared 10 trillion won by adding another 10 trillion won. Furthermore, 17.8 trillion won in funds will be separately supplied to companies facing liquidity difficulties due to the novel coronavirus infection (COVID-19).

President Moon expressed, "I appreciate the active participation of financial institutions, and the government will also actively strive to resolve the difficulties faced by financial institutions."

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