Dokyu-sang "Long-term interest rate rise and other financial market risks exist... Proactive management" (Comprehensive)

"Careful Review of US Interest Rates and Market Conditions... Will Take Thorough Measures"
"If Signs of Soft Landing Deterioration Are Detected, Classification of Soundness and Provisioning Will Be Implemented"

Dokyu-sang, Vice Chairman of the Financial Services Commission

[Asia Economy Reporter Kwangho Lee] Do Gyu-sang, Vice Chairman of the Financial Services Commission, said on the 25th, "As expectations for a return to daily life and economic recovery grow due to COVID-19 vaccinations, there are also risk factors in the financial market such as rising domestic and international interest rates."

Vice Chairman Do held a non-face-to-face financial risk response team meeting at the Government Seoul Office on the same day and stated, "Recently, as signs of economic recovery centered on the United States have become visible, inflation expectations are increasing and long-term interest rates are gradually rising."

Vice Chairman Do expressed, "We will thoroughly monitor market conditions and take preemptive measures in case the rising trend of U.S. interest rates synchronizes with domestic interest rates."

He also mentioned, "Since the bill to strengthen confiscation and recovery measures against capital market price manipulation acts was passed yesterday at the Political Affairs Committee, we will also make thorough inspections and efforts to improve to eradicate unfair trading."

At the meeting, the preparation status for a smooth landing of maturity extensions and interest deferrals in the financial sector was also reviewed.

Vice Chairman Do explained, "All financial sectors decided to extend the maturity extension and repayment deferral measures until the end of September this year after two extensions since April 1 last year," adding, "The five principles of smooth landing support were designed to prevent a sudden increase in borrowers' repayment burdens in the future, considering the real economy conditions and the financial sector's capacity to bear the burden."

The five principles of smooth landing support include providing optimal repayment plan consulting, granting repayment periods longer than the deferral period, not charging interest on deferred interest, waiving early repayment fees, and allowing borrowers to make the final choice on the repayment method.

Vice Chairman Do said, "I understand that the banking sector is preparing and implementing a smooth landing system with various repayment methods and pre-consultations under the principles of supporting small and medium-sized enterprises and preventing insolvency," and urged, "Please prepare without fail by early building of IT systems and simplifying approval procedures related to repayment methods so that a smooth landing can be achieved while minimizing the burden on borrowers."

He continued, "If signs of insolvency are detected during the smooth landing process, please adjust the soundness classification and accumulate sufficient provisions."

He added, "The financial authorities will also form an on-site support team together with each financial association to actively support by communicating with the field, receiving difficulties, and improving systems."

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