Korea Securities Finance Supplies 15.8 Trillion Won Liquidity to Securities Firms

Maintaining a 22.5% Increase Compared to Early March

[Asia Economy Reporter Oh Ju-yeon] Korea Securities Finance is providing large-scale liquidity support to securities firms facing difficulties in fund liquidity due to the novel coronavirus infection (COVID-19) crisis.

According to Korea Securities Finance on the 1st, the scale of liquidity funds currently supported to domestic securities firms reached 15.8 trillion won as of the 26th of last month. This includes own funds (13.4 trillion won), Bank of Korea RP (1.4 trillion won), and investor deposits (1 trillion won). This is a 22.48% increase compared to 12.9 trillion won in early March before the stock market plunge caused by COVID-19, maintaining the liquidity supply scale that was significantly increased during the stock market crash at the end of March.

At the end of March, the liquidity supply scale to securities firms was significantly expanded to 18.8 trillion won. The liquidity supply amount, which was previously supported by own funds at around 12.8 trillion won, was increased by 2.7 trillion won to 15.5 trillion won on March 31, and an additional 1.4 trillion won was supplied from investor deposit resources through collateral loans and inter-institution RP, up from the previous 100 billion won. Through the Bank of Korea RP, 1.8 trillion won was secured to assist securities firms' fund procurement. The liquidity supply amount increased during March reached 5.9 trillion won. This is twice the amount of liquidity supply (2.3 trillion won) additionally provided by Korea Securities Finance's own funds in September during the 2008 global financial crisis.

Korea Securities Finance also contributed to improving securities firms' collateral capacity by exchanging securities held by securities firms into eligible collateral securities available in the market through bond lending brokerage. The additional volume of bond lending brokerage conducted by Korea Securities Finance in March was 5.7 trillion won, and the cumulative bond lending brokerage scale as of the 26th of last month was 49.1 trillion won.

A Korea Securities Finance official stated, "We will continuously prepare support measures for securities firms, such as expanding liquidity supply methods and securing additional resources, through strengthened communication with policy authorities and the industry."

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