Financial Services Commission Chairman Ko Seung-beom Meets with Financial Association President Today... What Will They Discuss?

Prospects for Further Extension of COVID-19 Financial Support and Discussions on Household Debt

Financial Services Commission Chairman Ko Seung-beom is giving a greeting at the Financial Services Commission Small and Medium Business and Small Merchant On-site Meeting held at the Korea Federation of SMEs in Yeouido, Seoul on the morning of the 9th. On this day, Chairman Ko Seung-beom is known to have listened to opinions regarding financial difficulties of small and medium businesses and small merchants related to the COVID-19 crisis, as well as financial support measures such as maturity extension and repayment deferral through the meeting. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kim Jin-ho] Go Seung-beom, Chairman of the Financial Services Commission, will hold a courtesy meeting with the heads of major financial sector associations. At this meeting, Chairman Go is expected to request understanding and cooperation on various measures, ranging from household debt policies to the extension of COVID-19 financial support.

According to the financial sector on the 16th, Chairman Go will meet in the afternoon at the Bankers' Hall in Jung-gu, Seoul, with the heads of six associations: the Korea Federation of Banks, Korea Financial Investment Association, Korea Life Insurance Association, Korea Non-Life Insurance Association, Korea Credit Finance Association, and Korea Federation of Savings Banks.

This meeting, which also serves as a greeting on his inauguration, is the first official gathering with financial sector association heads since his appointment as Chairman of the Financial Services Commission. Discussions are expected to focus on strengthening management of the rapidly increasing household debt and the third extension of the COVID-19 financial support program.

At the time of his inauguration, Chairman Go set the target growth rate for household debt this year at 5-6%. Accordingly, financial authorities have been enforcing strict management not only at bank counters but also in the secondary financial sector, where balloon effects have been observed.

However, recently Chairman Go told reporters that achieving the target would be difficult and that management would be maintained around the 6% level. Therefore, additional household debt measures are expected to be mentioned at this meeting. In particular, it is anticipated that he will demand self-help measures to prevent balloon effects, especially targeting heads of secondary financial sector associations.

Furthermore, he is expected to seek understanding regarding the third extension of the 'COVID-19 Financial Support Program,' his first policy since taking office. Previously, the ruling party and government decided to extend the loan maturity extension and interest payment deferral measures, amounting to 222 trillion won. However, as concerns about moral hazard among borrowers have been raised in the financial sector, Chairman Go is likely to actively explain and seek understanding on this issue.

In addition, the six major financial associations have proposed internal control improvement plans, including disciplinary measures centered on the board of directors, following the first trial verdict of Sohn Tae-seung, Chairman of Woori Financial Group. Discussions on this matter are also expected. Chairman Go has previously stated that he would "review improvements to the disciplinary system" in relation to this issue.

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