Financial Services Commission: "Low Draft Fund Performance Due to Reduced Demand from Airline Profits and Others"

"Major Airlines and Others Fortunately Post Q2 Profit"
"Demand May Increase Depending on COVID Trends"

Eun Sung-soo, Chairman of the Financial Services Commission (Photo by Yonhap News)

[Asia Economy Reporter Kim Hyo-jin] The Financial Services Commission stated regarding the poor performance of the 40 trillion won-scale Industrial Stabilization Fund (Gian Fund) and the resulting effectiveness controversy that "this is largely due to a decrease in demand factors, such as major airlines, which were expected to need support, fortunately turning profitable in the second quarter."

On the 30th, the Financial Services Commission made this statement in a Q&A style press reference material addressing issues surrounding various financial support programs implemented in response to the novel coronavirus infection (COVID-19).

The Gian Fund was established as a 'second line of defense' to support large-scale key industries, following the '135 trillion won + α' scale financial support program related to COVID-19. Although airlines were expected to be immediate beneficiaries, they have remained in a 'business suspension' state so far. This has led to criticism inside and outside the financial sector, such as 'government's market analysis and demand forecasting failure.'

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However, the Financial Services Commission explained, "There is a possibility that the number of companies utilizing the Gian Fund will increase depending on the future trend of COVID-19 resurgence and changes in the real economy situation."

The Financial Services Commission also judged that since there is remaining capacity in support programs for small business owners, SMEs, and financial market stabilization, these can serve as the first line of defense. They expressed plans to ensure appropriate financial support through the Gian Fund if the management situation of key industries such as airlines worsens in the future.

Regarding controversies over the poor performance of the Bond Market Stabilization Fund, the low-credit corporate bond and commercial paper (CP) purchase organization, and the partner company support program, the Financial Services Commission self-assessed that "their mere existence contributed to alleviating market anxiety to some extent" and explained that "they plan to actively support these programs going forward to achieve the purpose of supporting low-credit and vulnerable industries."

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