Eun Seong-su: "Securities Market Stabilization Fund of 10.7 Trillion Won Established... To Be Deployed Starting Next Month"

[Image source=Yonhap News]

[Asia Economy Reporter Park Ji-hwan] The government plans to stabilize the stock market by establishing a Securities Market Stabilization Fund worth 10.7 trillion won and providing tax support for Individual Savings Accounts (ISA).

On the 24th, Eun Sung-soo, Chairman of the Financial Services Commission, held a briefing after the 2nd Emergency Economic Meeting chaired by President Moon Jae-in and announced, "We will establish a Securities Market Stabilization Fund involving the five major financial holding companies, 18 financial firms, and the Korea Exchange." It will be operated from early next month with a scale of 10.7 trillion won, which is 20 times larger than during the financial crisis.

Chairman Eun stated, "To promote overall stability in the stock market, the fund will invest and operate in index products representing the entire market, such as the KOSPI 200, rather than individual stocks," adding, "A Risk Management Committee composed of contributing financial companies will conduct the first capital call of 3 trillion won in the afternoon." The Financial Services Commission plans to pre-allocate about 700 billion won from securities-related institutions' investments more swiftly, even before April. A capital call refers to a method where part of the investment funds is raised and executed first, and additional funds are deployed if further demand arises.

Chairman Eun Sung-soo said, "We will ease the prudential regulation (risk-weight ratio) on the fund's capital contributions and also consider tax support measures to reduce the risk of investment losses."

The Financial Services Commission also plans to enable stock investment through ISAs and expand the eligibility from income earners to residents, among other tax support measures.

Chairman Eun urged, "In addition to the efforts of the financial sector and the public, institutional investors such as pension funds should also trust the resilience of our economy and stock market from a long-term perspective and actively participate in market stabilization."

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