"Controversy Over Maturity Extension and Repayment Deferral Stems from Misunderstanding... Call for Restraint on Excessive Concerns"

Holding a Meeting to Review and Communicate Current Financial Market Issues

Kim So-young, Vice Chairman of the Financial Services Commission, on the 1st addressed the September crisis rumors related to the recent expiration of maturity extensions and repayment deferrals for self-employed and small business owners, stating, "Since the financial authorities are carefully managing the situation to minimize the burden on borrowers and sequentially resolve debt issues, it is necessary to refrain from excessive concerns such as crisis rumors."

Kim So-young, Vice Chairman of the Financial Services Commission, is presiding over the Financial Market Issues Review and Communication Meeting held at the Government Seoul Office Building on the 1st. Provided by the Financial Services Commission.

On the same day, Vice Chairman Kim held a 'Financial Market Current Issues Review and Communication Meeting' at the Government Complex Seoul in Jongno-gu, Seoul, with experts from the Financial Supervisory Service and national and private research institutions, and said, "This is an unnecessary controversy based on facts that differ from reality, stemming from insufficient dissemination of the detailed contents of the maturity extension and repayment deferral measures."

Vice Chairman Kim emphasized, "Support for self-employed and small business borrowers does not end in September, and the maturity extension will be automatically extended until September 2025," adding, "For borrowers with principal and interest repayment deferrals, orderly soft landing will be achieved by supporting up to one year grace period (limited to deferred interest) followed by five years of installment repayment according to the repayment plan (98.1% completed) prepared in consultation with financial companies."

Meanwhile, the meeting discussed future macroeconomic conditions and risk factors, as well as the status and outlook of major key industries by sector. The attending experts forecasted that the global economy, centered on the US and Eurozone, is improving, and that the Korean economy will show a gradual recovery in the second half of the year.

However, they assessed that the global economic outlook is not entirely bright, and there is concern that the pace of domestic economic recovery may slow due to downside factors such as prolonged US tightening and sluggish Chinese economy.

Additionally, amid the prolonged low interest rate environment and eased financial conditions during the COVID-19 response, potential risks in companies have accumulated. With recent changes in conditions such as rising production costs, high interest rates, and tightening financial environment, an analysis was presented that corporate credit risk may increase, especially among marginal companies.

Regarding this, Vice Chairman Kim said, "As the participation of companies in direct financial markets expands and the interconnection between the real economy and financial markets increases, it is very important for financial market stability to timely grasp the business environment and financial status of major industries and prepare countermeasures for companies with high credit risk," urging, "The Financial Supervisory Service and related agencies should establish a thorough response system for monitoring corporate credit risks."

Furthermore, Vice Chairman Kim stated, "During times of uncertainty, each economic agent may react sensitively even to small shocks, posing a risk to market stability," and added, "We plan to communicate with the market frequently based on accurate information to prevent fake news and false information from disrupting our market."

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