Forecast Joint Symposium "Close Coordination Among Financial Safety Net Institutions"

The Korea Financial Research Center and the Korea Deposit Insurance Corporation held a joint policy symposium on the 10th at the KDIC headquarters in Jung-gu, Seoul, under the theme "Policy Tasks for Changes in the Financial Environment and Strengthening the Financial Safety Net." Photo by Korea Deposit Insurance Corporation

[Asia Economy Reporter Song Seung-seop] The Korea Deposit Insurance Corporation and the Korea Financial Research Center jointly held a policy symposium on the theme of ‘Changes in the Financial Environment and Policy Tasks for Strengthening the Financial Safety Net.’

According to the financial sector on the 11th, the two organizations held the symposium at the KDIC headquarters in Jung-gu, Seoul the previous day and conducted related discussions. The symposium was attended by Yoon Jae-ok, Chairman of the National Assembly’s Political Affairs Committee, and Do Kyu-sang, Vice Chairman of the Financial Services Commission. To comply with quarantine guidelines, attendance was minimized and the event was broadcast live on YouTube.

Professor Ha Jun-kyung of Hanyang University, who gave the first presentation, stated, “A characteristic of the financial environment changes after COVID-19 is the increasing impact of the non-bank sector on financial stability,” adding, “The increase in risky investments in asset markets is emerging as a new risk factor, diversifying the sources of financial instability.” He emphasized, “It is necessary to strengthen monitoring of the non-bank sector and the overall financial market, as well as enhance cooperation and capabilities among financial safety net institutions.”

In the second presentation, Eunji Kwon, Research Fellow at KDIC, and Myungwon Kim, Associate Research Fellow, said, “The essence of the deposit insurance system lies in suppressing the possibility of large-scale repayment demands through guarantees on short-term liabilities,” and proposed that “given the current situation where the role and scale of non-bank financial intermediation have grown, the system should evolve to provide guarantees on short-term liabilities of the non-bank sector in times of crisis.”

They continued, “To respond to the crisis potential arising from the growth of the non-bank sector, it is important to strengthen the role of the deposit insurance system,” and suggested, “introducing an emergency liquidity support system that proactively supports both banks and non-bank financial institutions.”

A KDIC official stated, “Based on experts’ opinions, we will continue to improve the system for depositor protection and financial stability to respond to the post-COVID-19 changed environment,” and added, “We plan to closely coordinate among financial safety net institutions.”

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