Eun Sung-soo "Will Prepare a Smooth Transition Plan for Normalizing COVID-19 Financial Support"

Financial Services Commission Holds Meeting to Evaluate COVID-19 Response Policies
Discussing Overcoming COVID-19 and Financial Policy Directions for 2021
"Seeking Optimal Policy Mix for Normalizing Financial Support: Scope, Timing, Order, and Methods"

Eun Sung-soo, Chairman of the Financial Services Commission, is conducting a non-face-to-face video conference on COVID-19 response policy evaluation at the Government Seoul Office in Jongno-gu, Seoul on the 21st.

[Asia Economy Reporter Kangwook Cho] Eun Sung-soo, Chairman of the Financial Services Commission, stated on the 21st, "We will seek the optimal policy combination regarding the scope, timing, order, and method of normalizing financial support."

On the same day, Chairman Eun held a 'Policy Evaluation Meeting on COVID-19 Response' with financial institutions and related organizations, saying, "Depending on the future COVID-19 situation, preparing a soft-landing plan to normalize temporary financial support measures is the way to support a sound recovery of the real economy and minimize the impact on the soundness of financial companies."

This meeting was organized to evaluate the achievements of the COVID-19 financial support programs implemented throughout this year and to discuss the direction of next year's financial policies in preparation for overcoming COVID-19 and the post-pandemic period.

In his opening remarks, Chairman Eun evaluated, "The united effort of the entire financial sector to flawlessly execute unprecedented scale financial support has been a major factor in creating conditions for our economy to rebound."

Regarding the ‘Livelihood and Financial Stability Package Program’ worth 175 trillion KRW plus alpha, established to overcome the COVID-19 crisis, the first emergency loan program for small business owners was almost fully utilized (about 76%) within two months of its launch. The policy finance program for small and medium-sized enterprises (SMEs) and mid-sized companies exceeded its target (29.1 trillion KRW) with support amounting to 32.5 trillion KRW.

Since April, the Economic Central Disaster and Safety Countermeasures Headquarters’ Financial Risk Response Team has held 31 meetings with commercial banks and related organizations to monitor the status of COVID-19 financial support and review difficulties in financial support for SMEs and mid-sized companies.

Chairman Eun also explained and exchanged views on the response direction to the prolonged COVID-19 situation and next year’s financial policy direction.

He requested, "Success in quarantine is the shortcut to economic recovery, and the financial sector should make every effort to maximize the effectiveness of quarantine." He also said, "Even in the worst COVID-19 situation where social movement is minimized, the financial sector must maintain the functionality of the financial system with minimal personnel while ensuring no inconvenience in customer service," urging, "Please check work systems and prepare emergency work systems for each scenario to prepare for all possibilities."

Chairman Eun emphasized that since COVID-19 is lasting longer than expected and difficulties for small business owners and SMEs continue, support will be focused more on vulnerable sectors.

The government plans to flexibly continue supplying the second round of commercial bank loans for small business owners next year (32 trillion KRW out of 100 trillion KRW to be executed), and to expand the proportion of non-face-to-face loans from three banks this year to seven banks to ensure funds are supplied quickly and safely to small business owners.

He also pledged to thoroughly manage risks related to the increased market liquidity during the COVID-19 crisis response process.

Chairman Eun stressed, "We will proactively manage risk factors in the asset market, such as excessive concentration in high-risk assets, to prevent our economy from suffering after COVID-19, and prepare in advance so that the expanded liquidity can be adjusted in an orderly manner."

Finally, he requested the financial sector to take the lead in transitioning our economy to a leading economy after COVID-19. Chairman Eun said, "For the success of the Korean New Deal, private sector participation is essential, so we ask for the financial sector’s great interest and support to ensure smooth flow of funds into next-generation growth engines such as digital and New Deal sectors."

He added, "Since the government has prepared a promotion strategy for full-scale transition to the 2050 carbon-neutral era along with the Green New Deal, we ask the financial sector to also strive to activate green finance." He also requested participation in creating an elderly-friendly financial environment and stable supply of low-interest fixed-rate policy mortgages for newlyweds and youth to prepare for a low birthrate and aging society.

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