Financial Services Commission: "First Additional Capital Call of 3 Trillion Won to Start Next Week"

On the morning of the 28th, Kwon Dae-young, Standing Commissioner of the Financial Services Commission, explained the government's progress on the 50 trillion won+α liquidity support measures and discussed the current status of funds and response efforts of the financial sectors at a meeting to review the current status of the money market held with the Financial Supervisory Service, financial companies, and policy financial institutions at the Korea Federation of Banks in Jung-gu, Seoul.

[Asia Economy Reporter Song Hwajeong] Financial authorities continue to implement market stabilization measures. Next week, they plan to initiate the first additional capital call (fund capital request) amounting to 3 trillion won. To improve supply and demand factors in the corporate bond market, they are also promoting the dispersion of bond issuance by public institutions. Early next week, a meeting with related agencies will be held to discuss measures to stabilize the real estate market.

On the 28th, the Financial Services Commission held a status check meeting on the capital market together with the Financial Supervisory Service, the Korea Financial Investment Association, financial companies, and policy financial institutions. At the meeting, they explained the progress of the government's "50 trillion won + α liquidity support measures" announced at the emergency macroeconomic financial meeting on the 23rd, and shared and discussed the current capital status and response efforts of the financial sectors.

According to the Financial Services Commission, the Bond Market Stabilization Fund began purchases centered on commercial papers (CP) on the 24th. Considering the recent contraction in short-term capital market investment demand, they are operating while closely monitoring market conditions, including relaxing purchase conditions. The financial authorities plan to resume purchases of corporate bonds and asset-backed securities that are difficult for the market to absorb, and will start the first additional capital call of 3 trillion won next week. To ease the capital contribution burden on financial institutions caused by the capital call and minimize market shocks, they plan to have contributions made sequentially in installments.

Additionally, to improve supply and demand factors in the corporate bond market, the Ministry of Economy and Finance is promoting the dispersion of bond issuance by public institutions through consultations with related agencies at the government-wide level, and policy financial institutions such as the Korea Development Bank and Industrial Bank of Korea will minimize their bond issuance.

Regarding real estate project financing, the financial authorities plan to hold a meeting with related agencies early next week to discuss measures to stabilize the real estate market.

To stabilize and revitalize the fund intermediation function of the banking sector, which is relatively sound in terms of capital, based on market principles, financial authorities, banks, and private experts will gather to review and analyze various measures.

A Financial Services Commission official said, "We have discussed measures to stabilize the financial market through meetings with the asset-backed securities sector, financial holding companies, mutual finance sectors, and insurance sectors recently," adding, "We will promptly review the various opinions raised at the meetings."

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