Top 5 Landowners to Inject 95 Trillion Won by Year-End for Market Stability (Comprehensive)

Financial Services Commission Chairman and Heads of 5 Major Financial Holding Companies Meeting
Chairman Kim Ju-hyun Requests Liquidity Supply and Support for Vulnerable Borrowers to Stabilize Financial Markets
Biweekly Meetings to Be Regularized

Financial Services Commission Chairman Kim Ju-hyun is taking a commemorative photo with the chairmen of the five major financial holding companies at the Bankers' Hall in Jung-gu, Seoul on the 1st. From the left, Cho Yong-byeong, Chairman of Shinhan Financial Group; Sohn Tae-seung, Chairman of Woori Financial Group; Yoon Jong-kyu, Chairman of KB Financial Group; Kim Ju-hyun, Chairman of the Financial Services Commission; Kim Kwang-soo, Chairman of the Korea Federation of Banks; Ham Young-joo, Chairman of Hana Financial Group; Sohn Byung-hwan, Chairman of NongHyup Financial Group. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Song Hwajeong] The five major financial holding companies?KB Financial, Shinhan, Woori, Hana, and NH?will provide a total of 95 trillion KRW in liquidity support by the end of this year in response to the government’s request to stabilize the financial market. Additionally, until the market stabilizes, the Financial Services Commission (FSC) Chairman and the heads of the five major holding companies have agreed to meet regularly to monitor market conditions.

On the 1st, FSC Chairman Kim Joo-hyun held a meeting with the chairpersons of the five major financial holding companies to discuss the role of financial holding companies in stabilizing the financial market, supplying funds to the real economy sector, and supporting vulnerable borrowers.

Chairman Kim emphasized, "The market stabilization measures amounting to 50 trillion KRW plus alpha have prevented the recent bond market instability from worsening further," adding, "For the government’s measures to be effective, the roles and responsibilities of holding companies and affiliated financial firms, which have a significant market share and maintain soundness and liquidity, are crucial." He further noted, "The recent profits of financial holding companies and banks largely stem from the expansionary fiscal and monetary policies during the COVID-19 crisis and global tightening. Therefore, the public expects financial holding companies to play a greater role in market stabilization, the real economy, and support for vulnerable borrowers."

Five Major Financial Holding Companies to Supply a Total of 95 Trillion KRW by Year-End

The FSC Chairman requested the financial holding company chairpersons to ▲ supply liquidity to stabilize the financial market ▲ continuously provide credit to supply funds to the real economy sector ▲ support vulnerable borrowers. Chairman Kim urged, "Within the holding groups, please strengthen liquidity and soundness support among affiliated companies to enhance market trust in holding affiliates, and furthermore, as liquidity providers at the financial market level, fulfill your role in stabilizing the market." He also stated, "It is necessary to continuously provide credit to the real economy sector, such as small and medium-sized enterprises (SMEs), where demand for funds is high, to ensure that the flow of funds to the real economy is not blocked. Banks and financial holding companies should actively support vulnerable borrowers who are struggling with principal and interest repayments due to recent sharp interest rate hikes, facing difficulties in new financing, or excluded from the formal financial sector."

The five major financial holding companies announced their intention to contribute to market stabilization through market liquidity and affiliated company fund support totaling 95 trillion KRW (tentative plan) by the end of this year. Specifically, this includes 73 trillion KRW for expanded market liquidity supply, 12 trillion KRW participation in bond stabilization funds and securities market stabilization funds, and 10 trillion KRW for affiliated company fund supply within the holding groups. Measures include refraining from issuing bank bonds, supplying funds to public enterprises such as Korea Electric Power Corporation (KEPCO), small business owners, SMEs, and large corporations, purchasing special bonds, credit card bonds, corporate bonds, commercial paper (CP), and asset-backed commercial paper (ABCP), repurchase agreement (RP) purchases, maintaining money market fund (MMF) operation scale, and maintaining credit lines for the secondary financial sector.

Furthermore, the five major holding companies will actively expand fund supply to small business owners, SMEs, and large corporations, while also exploring and preparing support measures for vulnerable borrowers.

Financial Holding Company Chairpersons: "We Will Actively Work to Stabilize the Market"

The chairpersons of the financial holding companies acknowledged that risk awareness inevitably increases amid the global tightening process, but they believe the recent market reaction in Korea has been somewhat excessive. They expect market sentiment to gradually recover through government measures and pledged to actively work toward market stabilization.

Yoon Jong-kyu, Chairman of KB Financial Group, said, "It seems that the capital market became temporarily unstable due to the combined effects of the Legoland incident and bond issuance by public enterprises, but the financial authorities quickly took measures, and stability is gradually returning." He added, "The challenge ahead is how to overcome inflation and recession, but since we are still in the early stages, we need to pool our wisdom and overcome this together."

Cho Yong-byeong, Chairman of Shinhan Financial Group, stated, "If the credit market tightens continuously, it will affect both the won and foreign exchange markets, so we will do our best in the roles we have prepared."

Sohn Tae-seung, Chairman of Woori Financial Group, said, "We will devise various measures such as purchasing ABCP to supply short-term market liquidity and contribute to stabilizing the capital market."

Sohn Byung-hwan, Chairman of NH Nonghyup Financial Group, emphasized, "If market instability continues, even small external variables could cause significant market changes. At times like this, communication between policy authorities and financial companies is necessary, so we will actively cooperate with policy authorities to stabilize the financial market."

Ham Young-joo, Chairman of Hana Financial Group, said, "To overcome difficult situations together, the responsibility of holding companies, which play a central role in the financial market, is immense. We will support companies temporarily facing liquidity difficulties as much as possible and actively engage in supporting livelihood stabilization."

Kim Kwang-soo, Chairman of the Korea Federation of Banks, stated, "In the current high-interest rate environment and risk-averse sentiment, funds are concentrating in the banking sector. We will strengthen the banks’ fundamental role of circulating funds back into the real economy and financial markets through loans and fund supply, while also faithfully fulfilling the social role expected of banks, such as supporting vulnerable groups."

The FSC Chairman, holding company chairpersons, and the Korea Federation of Banks Chairman agreed to formalize the 'FSC Chairman?Five Major Holding Company Chairpersons Meeting' as a regular biweekly event to monitor market conditions until the market stabilizes. They also agreed to establish a permanent communication channel among working-level staff to closely monitor market conditions.

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