[2022 National Audit] LegoLand Incident Slow Response Criticized, Chairman Kim Juhyun Admits "Response Was Inadequate"

[Image source=Yonhap News]

[Asia Economy Reporters Song Hwajeong and Song Seungseop] Kim Juhyun, Chairman of the Financial Services Commission, stated that he humbly accepts the criticism that the Financial Services Commission's response to the bond market instability caused by the Legoland incident was delayed and inadequate.

At the National Assembly's Political Affairs Committee audit on the 24th, there were continued criticisms that the Financial Services Commission's response to the Legoland incident was slow.

Baek Hyeryun, Chairwoman of the Political Affairs Committee, said, "It is a serious problem that the Financial Services Commission is complacent about the impact on our economy when high-quality bonds guaranteed by local governments are defaulted," adding, "If one thing goes wrong, the entire national economy could collapse. The Financial Services Commission's judgment that such a level of measures could suffice is a warning sign. There will be unexpected variables in the future, and if the Financial Services Commission delays its judgment even slightly, irreversible situations could occur, so the Commission must be held accountable."

Park Jaeho, a member of the Democratic Party of Korea, pointed out, "Three weeks after the Legoland incident emerged, the Capital Call was announced to put out the urgent fire, and yesterday at the Emergency Macroeconomic Financial Meeting, an additional expansion of the market liquidity program was announced. However, I do not think these measures were timely, and what could have been stopped with a hoe is now difficult to stop even with a rake."

So Byeongcheol, a member of the Democratic Party of Korea, said, "Legoland was defaulted on October 5, and the Chairman's special directive came on October 20, resulting in a time lag of about 10 days. After Governor Kim Jintae of Gangwon Province's statement on rehabilitation application, three weeks have passed, and the market stabilization measures have been delayed, worsening the situation. I request the formation of a bond market stabilization organization jointly by the monetary and fiscal authorities."

In response, Chairman Kim said, "I humbly accept the criticism that our response to the Legoland incident and the recent tightening of the funding market was inadequate and delayed," adding, "When the Legoland issue first arose at the end of September, we increased the limits for purchasing corporate bonds and commercial papers (CP) hoping the situation would calm down, but it did not improve as expected. We took additional measures afterward, but they were implemented in several stages rather than all at once. We were inexperienced."

Regarding the need for additional support, Chairman Kim responded, "The measures announced yesterday are based on the funds and capacity available to the Financial Services Commission, and if more is needed, the Bank of Korea will step in to provide support."

On the establishment of an emergency organization, he stated, "The Financial Services Commission will take the lead on the emergency organization issue, but if necessary, we will closely discuss it in consultation with the Bank of Korea and other fiscal authorities."

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