Eun Sung-soo: "Policy-type New Deal Fund, Effectively Principal-Guaranteed"

[Asia Economy Reporter Minji Lee] Eun Sung-soo, Chairman of the Financial Services Commission, said regarding the government's 'Policy-type New Deal Fund' that "although the principal is not guaranteed, it effectively has the effect of principal protection."

At a briefing on the establishment of the New Deal Fund held at the Government Seoul Office on the 3rd, Chairman Eun responded to the question, "Does the New Deal Fund guarantee the principal?" by saying, "While principal protection is not explicitly stated, it has sufficient characteristics to ensure the principal can be protected retrospectively."

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, and Eun Sung-soo, Chairman of the Financial Services Commission, are announcing the 'Korean New Deal Financial Support Plan' at the briefing room of the Government Seoul Office Building on the 3rd. Photo by Moon Ho-nam munonam@

He explained, "The government finances invest an average of 35% in the sub-fund as a subordinated investment, which means the fund absorbs all losses until the loss reaches 35%."

He added, "While risks such as oil development are very high, most digital New Deal projects involve public institutions as counterparts, so it is hard to imagine such losses occurring. Generally, they are stable, but to be safe, the government invests an average of 35% subordinated capital."

On the same day, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, also said, "The government does not guarantee the principal, but it has an effect and nature similar to effectively guaranteeing it."

However, the proportion of government financial investment varies depending on the nature of the sub-fund. Deputy Prime Minister Hong stated, "Some are 20%, some are 40% different," and added, "How losses are covered can vary depending on the percentage of government and policy financial institution funds invested in the sub-fund."

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