[Interview with KOFIA Election Candidate ⑤] Kim Hae-jun "Unsecured PF Loans Should Not Be Used to Purchase the 2nd Chaean Fund"

"Unsecured Bonds Must Be Written Off"
"Alternative Exchanges Should Handle Coin Trading"
"Customer Assets Must Be Segregated in Coin Transactions"

[Asia Economy Reporter Hwang Yoon-joo] "There are bridge loans without collateral among real estate project financing (PF). Such bonds must be the sole responsibility of the securities firms. The Bond Market Stabilization Fund should not purchase them."

This was the response when asked about the most important current issue by former Kyobo Securities CEO Kim Hae-jun. Known as a virtuous leader, his answer was sharp. The securities industry recently formed the second Bond Market Stabilization Fund to alleviate the short-term funding market crunch and began operating it this week. To this end, they are currently reviewing the purchase of PF asset-backed commercial paper (ABCP).

Kim said, "The biggest issue in the industry right now is the acquisition criteria for real estate PF ABCP," pointing out, "Among bridge loans, which are contract deposit loans, about 10-30% of the total PF balance is estimated to be loans without land as collateral." He emphasized, "In such cases, securities firms must handle it internally as loan loss provisions. It is advantageous to boldly recognize losses early."

There is a reason why Kim mentioned the bond purchase criteria of the Bond Market Stabilization Fund. The second fund is contributed by nine major firms with KRW 450 billion (mezzanine), securities firms selling PF-ABCP with KRW 450 billion (subordinated), Korea Development Bank with KRW 450 billion (25% senior), and Korea Securities Finance Corporation with KRW 450 billion (senior). Securities firms will incur losses if they acquire non-performing bonds in the mezzanine or subordinated positions. The interests are complex and inevitably sensitive.

He said, "Both large and small firms have overextended their operations for profit. There was no problem when the real estate market was good, but issues arose as interest rates rose sharply and the market reversed quickly. There is no need to blame real estate PF itself."

Kim pointed out, "The real estate PF problem cannot be solved just by changing the chairman of the association." He noted, "There were PF defaults in 2008, but there was no liquidity crisis. Now, an unexpected variable is the rapid interest rate hikes in the U.S." He added, "Since the tightening stance will continue for a while, the liquidity crisis can only be resolved with the grand will of the Prime Minister, that is, the government."

He is a figure who has worked in the securities industry for a total of 37 years?21 years at Daewoo Securities and 16 years at Kyobo Securities. Especially at Kyobo Securities, he set the record as the longest-serving CEO for 13 years starting in 2008. Kim describes himself as having "experienced a period of great upheaval in the securities industry."

Kim is known for having left his mark on the capital market over a long time without making enemies. He also cites this virtue as a strength and considers himself a suitable candidate for the next chairman of the Korea Financial Investment Association (KOFIA). Kim confidently stated, "Communication is important for the KOFIA chairman," claiming his communication skills surpass those of other candidates.

He also announced that if he becomes the next KOFIA chairman, he will allow cryptocurrency trading on Alternative Trading Systems (ATS). Kim said, "Securities firms manage customer assets from deposits and operate only their own capital," adding, "Allowing cryptocurrency trading on ATS but managing it under the Capital Markets Act is safer."

Although Kim was initially negative about cryptocurrency trading itself, he explained that his view changed recently due to the bankruptcy filing of FTX, one of the world's top three cryptocurrency exchanges. He emphasized, "The important thing is to separate customer assets from exchange assets," and added, "It is better for investor protection to manage the market, where tens of trillions of won are traded, within the system rather than leaving it outside."

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