[1mm Financial Talk] "It's Okay, 9th Explanation" The Sigh of Saemaeul Geumgo

"A bank run is psychological, and when anxiety intensifies, customers can move their funds at any time."

Recently, as concerns over the insolvency risks in the secondary financial sector, including Saemaeul Geumgo and savings banks, have spread, the industry's worries have deepened. This is due to fears that even though liquidity and delinquency rates are at manageable levels, the spread of 'anxiety psychology' could lead to significant real customer withdrawals.

According to the financial sector on the 17th, Saemaeul Geumgo has issued explanatory materials six times in the past month regarding liquidity ratios, delinquency rate management, and related insolvency risks. The Ministry of the Interior and Safety, which supervises Saemaeul Geumgo, has also distributed similar explanatory materials three times.

Recently, from Saemaeul Geumgo to savings banks, rumors of a 'real estate project financing (PF)-triggered insolvency crisis' have been spreading almost daily, causing financial consumers to become unsettled. A mutual finance sector official said, "If Saemaeul Geumgo falters, the ripple effects will extend to credit unions and Nonghyup." Recently, malicious rumors have even spread, claiming that OK Savings Bank and Welcome Savings Bank suffered losses in the trillions of won due to PF loan issues, urging customers to withdraw their balances.

In fact, posts such as "Is it really safe to deposit in Saemaeul Geumgo?" and "Should I withdraw my money?" have sharply increased in financial communities. An employee of Saemaeul Geumgo said, "Even though our credit union is truly safe, some customers withdraw funds out of anxiety," adding, "While we must always remain vigilant given the uncertain economic situation, we feel unfairly criticized recently."

Saemaeul Geumgo states that it is always prepared for 'deposit payments' and that there is absolutely no problem with deposit protection. According to Saemaeul Geumgo, as of the end of February, its average liquidity ratio was 112.8%. The liquidity ratio is the ratio of liquid assets to liquid liabilities maturing within three months. For example, a liquidity ratio of 100% means that if there is a surge in withdrawal demands on deposits maturing within three months, the institution has the capacity to fully cover 100% of those demands.

Regarding depositor protection, Saemaeul Geumgo, like commercial banks, guarantees up to 50 million KRW including principal and interest. This is ensured through the Depositor Protection Reserve and liquid assets held by the National Federation of Saemaeul Geumgo in accordance with the Saemaeul Geumgo Act. According to Saemaeul Geumgo, the Depositor Protection Reserve amounts to 2.3858 trillion KRW, and the repayment reserve held by the National Federation of Saemaeul Geumgo was approximately 13.1103 trillion KRW as of the end of February.

Economic and financial leaders have also stepped in to calm the financial market turmoil. Kim Ju-hyun, Chairman of the Financial Services Commission, dismissed concerns about Saemaeul Geumgo's insolvency as unwarranted at the end of last month, and Lee Chang-yong, Governor of the Bank of Korea, stated, "Compared to the past, the delinquency rate of real estate PF is very low, and considering the loan loss provisions of financial institutions, including Saemaeul Geumgo, it is a manageable level."

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