Financial Services Commission: "Expansion of Relaxation on Soundness Ratios for Financial Companies Investing in the Jeungan Fund"
[Asia Economy Reporter Kangwook Cho] The Financial Services Commission (FSC) has decided to expand the level of relaxation of soundness ratios for financial institutions investing in the Securities Market Stabilization Fund.
On the 25th, the FSC announced, "At the first meeting of related agencies for the Securities Market Stabilization Fund held the previous day, the investing financial institutions requested an expansion of the relaxation level of soundness ratios, and we plan to actively accept this."
In this case, the negative impact on banks' financial soundness ratios, such as the BIS (Bank for International Settlements) capital adequacy ratio, caused by investments in the Securities Market Stabilization Fund can be mitigated.
Additionally, the FSC explained, "Some investing financial institutions preferred to invest through an integrated fund rather than a single fund, and we have decided to accept this."
On the same day, securities-related organizations held a subscription agreement ceremony for the Securities Market Stabilization Fund worth 760 billion KRW. The Securities Market Stabilization Fund is planned to be established with a total size of 10.7 trillion KRW.
Along with this, regarding support for the short-term funds market, the FSC stated, "The Bank of Korea supplied 2.5 trillion KRW to securities firms and Korea Securities Finance Corporation through open market operations for liquidity support, providing 700 billion KRW and 1.8 trillion KRW respectively," and added, "Korea Securities Finance Corporation plans to fully support 18 securities firms with 1.8 trillion KRW raised through the Bank of Korea repurchase agreements (RP) within today."
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Regarding financial support for companies affected by COVID-19, the FSC added, "Chairman Eun Sung-soo is scheduled to hold a meeting and signing ceremony with Prime Minister Chung Sye-kyun and the entire financial sector in the afternoon to overcome the COVID-19 crisis."
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