Vice Minister Ki Jae: "Concerns Over Increased Financial Market Volatility if Domestic Companies' Credit Ratings Decline"

[Asia Economy Reporter Jang Sehee] Kim Yong-beom, First Vice Minister of the Ministry of Economy and Finance, emphasized on the 16th, "We must prepare for the possibility that if the credit ratings of domestic companies begin to decline significantly due to deteriorating performance, volatility in the funding market could increase."

In his opening remarks at the macroeconomic financial meeting held at the Government Seoul Office on the same day, Vice Minister Kim said, "Domestic and international credit rating agencies are viewing the outlook for domestic companies' ratings negatively and are closely monitoring the first quarter earnings."

However, he assessed, "Amid the current novel coronavirus disease (COVID-19) crisis, our economy is expected to be less impacted than any other major country." He added, "This is attributed to successful quarantine measures as well as structural aspects of our economy."

Vice Minister Kim also stressed, "We are making every effort in crisis management to prevent COVID-19 from spreading beyond real economic shocks to financial system risks."

He stated, "We will closely monitor the corporate bond market and short-term funding market conditions," and added, "We will maintain a flexible stance in implementing market stabilization measures such as the bond market stabilization fund, corporate bond issuance support programs (P-CBO), and purchases of commercial paper (CP) and short-term bonds."

Furthermore, he said, "The government will support financial companies by temporarily easing regulations so that they can sufficiently and boldly support the real sector."

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