Kim Taehyun, President of Yeobo, "If Yeoboryo Increases, Consumers and Financial Companies Should Share the Burden"

On the 2nd, Kim Tae-hyun, President (center), is holding a press conference at the Korea Deposit Insurance Corporation headquarters in Jung-gu, Seoul.

[Asia Economy Reporter Song Seung-seop] Kim Tae-hyun, President of the Korea Deposit Insurance Corporation (KDIC), stated on the 2nd, "(The increase in deposit insurance premiums) should be appropriately shared between financial consumers and financial institutions."

At a press conference held at the KDIC in Jung-gu, Seoul, Kim Tae-hyun responded to concerns that "raising the deposit insurance premium rate could shift the burden onto consumers" by saying this. He explained, "From the depositor's perspective, there is a portion they must bear because their deposits are protected, and financial institutions also benefit."

Currently, the deposit insurance coverage limit has been fixed at 50 million KRW for over 20 years. When compared to the gross domestic product (GDP) per capita, the coverage ratio has decreased from 3.4 times in 2001 to 1.3 times at the end of 2020.

Regarding the question of whether it is difficult for KDIC to take preemptive measures against financial institutions showing signs of insolvency under current law, he replied, "We are naturally considering amendments to the legislation." Kim added, "Even if a financial institution is not insolvent, if the possibility is high, we are creating measures such as financial support and consulting with the Financial Services Commission. Currently, the best approach is to monitor risk factors within our authority and communicate necessary positions to financial authorities."

Concerning financial institutions that have not yet repaid public funds injected through SGI Seoul Guarantee and the National Federation of Fisheries Cooperatives, he said, "We are studying ways to initiate recovery and discussing with the Public Fund Management Committee," adding, "We are considering starting this within this year and are in consultation."

He continued, "The deposit insurance system has focused heavily on post-crisis management," and said, "If KDIC works together on business normalization before insolvency, it can increase the effective use of funds and reduce market shocks."

In this regard, he also added, "We have been working on creating a new deposit insurance system and believe it is necessary to review ways to enhance the sustainability of the deposit insurance system."

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