Seungbeom Go "Decision on COVID Loan Maturity Extension to Be Made Before Chuseok" (Comprehensive)

Candidate for Financial Services Commission Chairman Ko Seung-beom is attending the confirmation hearing held at the National Assembly on the 27th, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Jin-ho Kim] Ko Seung-beom, Chairman of the Financial Services Commission, said on the 31st that a decision on whether to extend the COVID-19 loan maturity extension and interest repayment deferral measures again would be made "before the Chuseok holiday."

Chairman Ko stated this in a meeting with reporters before his inauguration ceremony held at the Government Seoul Office on the same day, saying, "Considering the urgency of the matter, we should reach a conclusion as quickly as possible."

Chairman Ko had also expressed the same view during the National Assembly confirmation hearing on the 27th. He believes that due to the continued difficulties faced by self-employed individuals and small and medium-sized enterprises caused by strengthened social distancing measures, an extension is inevitable. Accordingly, it is expected that Chairman Ko will seek understanding from the financial sector on this issue during meetings with the heads of the five major financial holding companies and banks, which will take place shortly after his inauguration.

Chairman Ko also reiterated his strong concerns about household debt, which is the biggest risk factor for the Korean economy. In his inaugural remarks, he emphasized, "Household debt poses a risk to macroeconomic and financial market stability," adding, "We will mobilize all means and focus policy capabilities to eliminate the risk factors inherent in the rapidly increasing household debt."

Chairman Ko first stressed that the normalization of financial and monetary policies in major advanced countries, starting with the Bank of Korea's base rate hike, is an inevitable process, warning that the asset price increases driven by leverage and the unchecked expansion of private credit are no longer possible.

He went on to say that excessive debt accumulation lies behind all major and minor financial crises, including the 1997 International Monetary Fund (IMF) foreign exchange crisis and the 2008 global financial crisis. Referring to the recollection of Sir Adair Turner, former Chairman of the UK Financial Services Authority (FSA), who said, "Even a week before I started my duties as chairman in 2008, I did not realize the disaster was imminent," Chairman Ko made this point.

Therefore, he stated that the link between excessively increased household debt and overheated capital markets must be severed from now on. Chairman Ko declared, "We will mobilize all means to enhance the effectiveness of announced measures and eliminate the risk factors inherent in the rapidly increasing household debt."

Regarding cryptocurrency exchanges facing the risk of mass closures, he made it clear that "it can no longer be avoided or postponed," indicating that there will be no extension of the Special Financial Transactions Information Act (Special Act on Reporting and Use of Certain Financial Transaction Information, or "특금법") reporting deadline. He said, "We must minimize unpredictable damages that may occur to transaction participants," adding, "We will focus on international consistency and protection of citizens' property rights and also consider fundamental institutional improvements."

He also emphasized the need to foster innovation for the future development of the financial industry. Chairman Ko said, "We must not hesitate due to uncertainty when preparing for major future changes," adding, "We will boldly imagine, analyze meticulously, and institutionally support new changes."

Specifically, he cited ▲redefining the regulatory framework ▲the financial intermediation function ▲and financial consumer protection. He said, "First, it is urgent to seek cooperation methods among big tech, fintech, and existing financial sectors," adding, "Along with such innovation, we will focus on promoting trust through financial consumer protection."

Finally, Chairman Ko urged Financial Services Commission staff to engrave pride and determination that will determine financial market stability and financial industry development. He said, "Let's create practical financial policies that can solve real problems," adding, "We need a humble attitude that listens to the voices of the people, starting with closer policy cooperation with policy partners."

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