Hong Nam-ki: "New Deal Fund Does Not Mean Principal Guarantee"

Government Says "Not Even 0.0001%" Chance of Intervening in Yield

Deputy Prime Minister for Economy Hong Nam-ki is attending the government-related economic questions session held at the National Assembly on the 16th, responding to lawmakers' inquiries. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Lim Chun-han] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, responded on the 16th to criticisms that the New Deal Fund structure effectively guarantees the principal with taxpayers' money, stating, "That is not the case. Policy funds do not guarantee the principal." He added, "However, it means that the government's investment will preferentially cover the subordinated portion of the policy fund within a 10% range."

Deputy Prime Minister Hong made these remarks in response to a question from Yoo Ui-dong, a member of the People Power Party, during the economic sector questioning session at the National Assembly that day.

Hong explained, "Although it seems unlikely, if there is a significant loss, the private sector could also incur losses. Given the nature of the project, if only a portion suffers losses, the government's investment will cover the subordinated portion, preventing losses from affecting the private sector."

Regarding the possibility of government involvement in the fund's rate of return, Hong stated, "The possibility is not even 0.0001%."

In response to criticism that the current government cannot take responsibility at the fund's maturity, Hong said, "This system will continue under the next administration as it is a promise to the people. If there are illegal factors and responsibilities to be borne, I will take responsibility even if I have to step down."

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