Seungbeom Go: "No Political Consideration Such as Presidential Election in COVID-19 Financial Support Extension" (Comprehensive)

Financial Services Commission Chairman Holds Meeting with Heads of Six Major Financial Associations

Financial Services Commission Chairman Ko Seung-beom is attending the 'Financial Services Commission Chairman-Financial Association Presidents Meeting' held on the afternoon of the 16th at the Korea Federation of Banks in Jung-gu, Seoul.

[Asia Economy Reporter Jin-ho Kim] Ko Seung-beom, Chairman of the Financial Services Commission, stated on the 16th that the decision to extend the COVID-19 financial support program for the third time was not a measure taken in consideration of the upcoming presidential election in March next year.

Chairman Ko made these remarks to reporters after a meeting with the heads of six associations including 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 at the Bankers’ Hall in Jung-gu, Seoul.

The government announced at the meeting that it had finalized a plan to extend the application deadline for the COVID-19 loan maturity extension and repayment deferral measures by an additional six months until March next year.

However, within the financial sector, there are suspicions that political pressure may have influenced the decision, as the financial authorities had initially been considering extending the interest repayment deferral measures. Particular attention is being paid to the fact that the ruling party and government extended the maturity extension and repayment deferral measures until the end of March next year, during the presidential election period, before consulting with the financial sector.

In response, Chairman Ko clearly stated that there was no political judgment involved. He emphasized, "The (re-extension decision) was made solely based on economic considerations," adding, "Strengthening household debt management is also in the same context."

He further added, "When the third extension ends in March next year, the program will be properly concluded, and everything will return to normal."

The "orderly normalization" mentioned by Chairman Ko centers on solidifying the current soft-landing plan, allowing borrowers to repay their debts stably within their repayment capacity by providing a grace period of up to one year and extending the repayment period from the original three years to five years.

Additionally, for vulnerable borrowers, the debt adjustment system will be improved to provide proactive support to reduce debt burdens. The scope of support for bank-led pre-workout programs and the Credit Counseling & Recovery Service’s debt adjustment system will be expanded. Furthermore, about 4 trillion won in liquidity will be supported through policy finance programs, and financial burdens will be eased by measures such as long-term installment payments of loan principal and interest and reductions in guarantee fees.

Regarding the plan to re-extend the financial regulatory relaxation measures such as the liquidity coverage ratio (LCR) related to maturity extensions and interest repayment deferrals, he replied, "Only the period (six months as before) will be re-extended." The Financial Services Commission plans to submit the matter as an agenda item at the regular meeting on the 29th after further review.

In response to concerns that the government’s blocking of interim payment loans for real demand buyers to stabilize the real estate market could harm actual buyers, he said, "We will continue to discuss and review measures to ensure that real demand buyers are not harmed."

Regarding the heated controversy over big tech in the financial sector, he said, "We will approach it from the perspective of financial stability and financial consumer protection under the principle of 'same function, same regulation,'" adding, "However, the Financial Services Commission’s existing view that financial innovation is important remains unchanged."

On the controversy over high fees charged by big tech companies, he said, "It is difficult to give a uniform answer as various factors need to be reviewed," and added, "We will take sufficient time to communicate and respond between big tech and the financial industry."

Regarding the Financial Supervisory Service’s decision tomorrow on whether to appeal the lawsuit related to overseas interest rate-linked derivative-linked funds (DLF) involving Sohn Tae-seung, Chairman of Woori Financial Group, he refrained from commenting, saying, "We will respect whatever decision is made." He added, "I will have an opportunity to speak about my position on the appeal later," and said, "Since we received suggestions related to internal controls at today’s meeting, we will try to prepare improvement measures through future consultations."

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