Seungbeom Ko, Policy Financial Institution Heads Meeting Emphasizes "Orderly Normalization in Response to COVID-19"

Financial Services Commission Holds Meeting with Heads of 8 Policy Financial Institutions

At the 'Policy Financial Institutions Heads Meeting' held on the 28th at the Bankers Hall in Myeongdong, Seoul, Ko Seung-beom, Chairman of the Financial Services Commission, delivers the opening remarks.

[Asia Economy Reporter Jin-ho Kim] Ko Seung-beom, Chairman of the Financial Services Commission, emphasized on the 28th, "It is time to consider measures to timely promote orderly normalization and future preparedness along with the response to the COVID-19 crisis."

Chairman Ko made these remarks at the 'Policy Financial Institutions Heads Meeting' held at the Bankers' Hall in Myeong-dong, Seoul. Attendees included Lee Dong-geol, President of the Korea Development Bank; Yoon Jong-won, President of the Industrial Bank of Korea; Bang Moon-gyu, President of the Export-Import Bank of Korea; Yoon Dae-hee, Chairman of the Korea Credit Guarantee Fund; Choi Jun-woo, President of the Korea Housing Finance Corporation; Moon Sung-yoo, President of KAMCO; Wi Sung-baek, President of the Korea Deposit Insurance Corporation; and Lee Gye-moon, President of the Korea Inclusive Finance Agency.

Chairman Ko stated, "To completely overcome COVID-19 and achieve a new leap forward for our economy, we must closely examine quarantine, real economy, and financial conditions," adding, "We will focus policy directions by dividing sectors that require support and management through financial policies from those where normal market principles can be reactivated."

To this end, he presented four major detailed policy tasks: support for vulnerable sectors, financial stability, restoration of market functions, and financial development and economic growth.

Regarding support for vulnerable sectors, he announced that sufficient policy funds will be provided until the complete overcoming of COVID-19 for those with slower recovery speeds, such as small and medium-sized enterprises and small business owners. He also stated that under the eased macro policies, accumulated household debt and other financial imbalances will be strictly managed in advance, and that market principles will be allowed to operate during the COVID-19 emergency measures. Furthermore, based on financial stability, the fund intermediation function will be strengthened to expand funding for future new industries such as the New Deal, innovation, and carbon neutrality, and support will be provided for business restructuring and proactive corporate restructuring to help existing industries adapt to the changed industrial environment after COVID-19.

Chairman Ko said, "Responding to the COVID-19 crisis and orderly normalization require a sophisticated design process based on 'accurate understanding of the situation,' 'analysis of the effectiveness of support policies,' and 'future outlook,'" adding, "We will create opportunities for communication and discussion with policy financial institutions and experts."

During today's meeting, multifaceted discussions were also held on the role that policy finance should play in responding to the COVID-19 crisis and the orderly normalization process.

Chairman Ko announced that a supplementary plan had been prepared regarding the extension of COVID-19 loan maturity extensions and repayment deferral measures as the first policy task for orderly normalization.

Specifically, to accelerate support for potential non-performing loan concerns, a concrete schedule and plan will be promptly prepared through the acquisition of non-performing loans of small and medium-sized corporations and the expansion of debt adjustment support.

To ensure the smooth supply of the previously announced liquidity of 4 trillion won (existing 1.5 + new 2.5), existing programs will be executed to the maximum extent, and preparations will be made to implement new programs immediately upon exhaustion of limits to support the normalization process.

In particular, Chairman Ko requested that policy finance continue to expand supply in policy-based financial services such as the Sunshine Loan to strengthen the 'safety net' function for low-income and vulnerable groups.

He also requested that policy finance take the lead in securing future growth engines for our economy and financial industry that can create high added value, such as the New Deal, innovative growth, and carbon neutrality. In response, policy financial institutions pledged to actively monitor global environmental regulation changes and industry-specific green technology development and to actively discover and introduce various new green-specialized financial programs.

Lastly, there was mention of the 'K-Shipbuilding Re-leap Strategy' announced by the government on the 9th.

Chairman Ko said, "Policy financial institutions must actively support the re-leap of our shipbuilding industry," adding, "Since most small and medium-sized shipbuilders have completed restructuring and order conditions are improving, financial support such as the issuance of refund guarantees (RG) for advance payments should be more actively pursued."

In response, heads of policy financial institutions expressed their intention to actively review various support measures. They plan to pursue multifaceted support measures such as expanding the RG special guarantee limit, supporting business restructuring of small and medium shipbuilders, and providing liquidity support due to rising raw material prices.

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