Liquidity Supply and Stock Market Boom... KODIT's Deposit Guarantee Fund Surpasses 2,500 Trillion Won

At the End of Last Year, Deposits with Designated Beneficiaries Reached 2,534 Trillion Won
Growth Rate 12.5%... Largest in 10 Years

[Asia Economy Reporter Song Seung-seop] At the end of last year, insured deposits exceeded 2,500 trillion won, marking a 12.5% increase compared to the end of the previous year.

According to the "2020 Year-End Insured Deposit Trends" announced by the Korea Deposit Insurance Corporation on the 30th, total insured deposits amounted to 2,534.4 trillion won, increasing mainly in banks and financial investment sectors. The growth rate of 12.5% is the highest in 10 years. Compared to the 4.3% increase in insured deposits in 2018, this is nearly three times steeper.

Insured deposits refer to deposits protected by the Deposit Insurance Corporation. These include deposits in banks and savings banks, investor deposits at financial investment firms, insurance companies' reserve funds, and CMA accounts at comprehensive financial companies. Depositors who are government entities, local governments, or insured financial companies are excluded.

The Deposit Insurance Corporation analyzed that the increase in market funds was influenced by the government's liquidity supply policies in response to the economic uncertainties caused by COVID-19 domestically and internationally. Insured deposits in banks and savings banks increased by 1,551.9 trillion won (14.7% increase) and 71.3 trillion won (15.9% increase), respectively, compared to the previous year.

Insured deposits in financial investment firms such as securities companies and asset management companies also surged significantly due to the stock market boom. Insured deposits, which were only 31.7 trillion won, increased by 135% in one year to 74.5 trillion won, surpassing insured deposits in savings banks for the first time.

On the other hand, the insurance sector saw a slowdown in the growth rate of insured deposits to 3.8%, down from the previous year. This is interpreted as a result of the prolonged low-interest-rate environment shrinking the long-term insurance market. The growth rate of insured deposits in the insurance sector has been declining every year since recording 7.1% in 2017.

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