Financial Services Commission Announces Introduction of 'Financial Stability Account' to Prevent Financial Company Insolvency

[Asia Economy Reporter Sim Nayoung] On the 26th, the Financial Services Commission discussed the 'Introduction Plan for the Financial Stability Account to Prevent Insolvency of Financial Companies' at the 'Financial Risk Response TF' meeting. This is a follow-up measure to the decision made at the 'Financial Risk Response TF' meeting on the 23rd of last month to "promote institutional improvements to enable proactive funding support to block the risk of insolvency of financial companies due to increased financial market volatility."

With changes in the financial environment, the need to introduce a system to prevent insolvency of financial companies and proactively block the spread of risk has been raised. Major countries such as the United States, the EU, and Japan established preventive support systems following the 2008 global financial crisis.

The Financial Services Commission is reviewing a plan to introduce a 'Financial Stability Account' to provide timely liquidity supply and capital expansion support to prevent insolvency of financial companies. A separate account will be established within the Deposit Insurance Fund, with resources for the account secured through guarantee fees, borrowing from other accounts, and bond issuance, and it will be operated without fiscal burden.

After consultations with related ministries, affiliated institutions, and expert seminars to gather opinions, detailed plans will be prepared and efforts will be made to amend the 'Depositor Protection Act.'

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