Financial Services Commission Requests Banks to Adjust Timing and Scale of Bank Bond Issuance

[Asia Economy Reporter Sim Nayoung] On the 14th, financial authorities requested seven banks to "adjust the timing and scale of bank bond issuance so as not to affect the bond market."

On the same day, the Financial Services Commission held a 'Banking Sector Financial Market Review Meeting' attended by deputy heads of the seven banks along with the Financial Supervisory Service. At the meeting, they stated, "There is a concentration of funds in banks, which may lead to liquidity shortages in the secondary financial sector," and urged, "Please refrain from excessive competition in fundraising."

The Financial Services Commission also requested, "Please proceed with fundraising through bank bonds in a way that minimizes the impact on the bond market in terms of timing and scale," and added, "To alleviate instability in the short-term funding market, please engage in purchasing and repurchasing commercial paper (CP), asset-backed commercial paper (ABCP), promissory notes, and repurchase agreements (RP), and maintain the operating scale of general money market funds (MMF) such as MMFs."

They continued, "It is necessary to maintain credit lines for the secondary financial sector," and stated, "We will actively consider regulatory improvements to resolve difficulties in fundraising and management faced by the banking sector."

At the meeting, the deputy heads of the banks said, "We are making efforts to stabilize the short-term funding and bond markets by actively purchasing CP and ABCP," and added, "Due to recent minimization of bank bond issuance, fundraising conditions have become difficult, so we ask the financial authorities to consider necessary measures."

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