Eun Seong-su: "Short Selling Reform to Be Completed Without Delay... Household Debt Soft Landing to Be Promoted" (Comprehensive)

Dual Monitoring System Established... "Illegal Short Selling Will Be Definitely Detected"
"Careful Management of Household Debt... Two-Track Approach for Corporate Debt Promoted"

Eun Sung-soo, Chairman of the Financial Services Commission

[Asia Economy Reporter Kwangho Lee] Eun Seong-su, Chairman of the Financial Services Commission, stated on the 17th, "We will complete institutional improvements without fail before the resumption of short selling."

At the National Assembly's Political Affairs Committee briefing on the same day, Chairman Eun said, "We will establish a dual monitoring system at securities firms and exchanges to ensure that illegal short selling is definitely detected and punished."

He added, "We will secure sufficient stock lending volumes for individuals to expand short selling opportunities for them, thereby improving unfairness issues between individuals and institutions, and address concerns that market makers might engage in excessive short selling."

The government banned short selling on all stocks for six months starting in March last year due to the sharp stock price decline caused by the COVID-19 crisis and extended the suspension twice thereafter. Short selling is scheduled to partially resume from May 3, limited to KOSPI 200 and KOSDAQ 150 stocks.

Chairman Eun identified four major financial policy tasks for this year: early overcoming of the COVID-19 crisis, supporting a transition to a leading economy, digital financial innovation, and financial consumer protection.

He emphasized, "We will carefully manage household debt, which inevitably increased during the COVID-19 response process, so that it does not become a burden on our economy. Above all, we will faithfully implement the 175 trillion won+α livelihood and financial stability program to support small business owners and companies facing difficulties."

In particular, he expressed, "We will provide sufficient credit to companies experiencing temporary liquidity shortages due to COVID-19, and for companies facing structural difficulties amid environmental changes, we will promote two-track support by encouraging business restructuring and proactive corporate restructuring."

Chairman Eun also mentioned, "Policy finance and the private financial sector have agreed to jointly supply 170 trillion won+α in New Deal finance over the next five years. This year, we aim to raise up to 4 trillion won by establishing sub-funds of the policy-type New Deal fund, and separately allocate about 18 trillion won in policy funds to New Deal sectors to actively create momentum for the Korean New Deal."

Furthermore, he stated, "We will strengthen policy financial support in the green sector, including the establishment of green-specialized loan and guarantee programs, and build an institutional foundation for activating green finance by reforming the disclosure system to consider ESG (environmental, social, and governance) factors."

Chairman Eun also expressed his intention to innovate the financial industry and expand digital finance. He explained, "We will strengthen financial and non-financial support for fintech companies, continuously expand convenient and secure non-face-to-face financial infrastructure such as establishing standards for non-face-to-face identity verification and authentication, and advancing open banking."

He added, "Regarding financial services provided by platform companies, we will establish the minimum necessary regulations for user protection and fair competition. However, to prevent the financial innovation using platforms itself from shrinking, we will also pursue balanced measures such as licensing non-financial credit bureaus (CBs) and other support plans."

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