Savings banks to receive liquidity from Bank of Korea in emergencies... "Strengthening risk management"

Q1 Liquidity Ratio 227.3%

The Korea Federation of Savings Banks announced on the 18th that it has been selected as a counterparty institution for the Bank of Korea's open market operations involving repurchase agreements.

The savings bank industry will be able to receive liquidity support from the Bank of Korea in the event of an unexpected liquidity crisis. Previously, liquidity support systems were operated using external credit lines such as deposits at the Korea Federation of Savings Banks or commercial banks. Securing an additional liquidity supply channel is expected to strengthen liquidity management capabilities.

In January, the Bank of Korea decided to expand the scope of institutions eligible for open market operations to include central associations of non-bank deposit-taking institutions and individual savings banks to enhance market stabilization functions. Accordingly, the Korea Federation of Savings Banks conducted explanatory meetings for savings banks, built infrastructure with the Korea Securities Depository, developed asset management systems, and prepared for government bond purchases.

The Korea Federation of Savings Banks explained that although there are some concerns about the management situation of savings banks due to the recent slowdown in economic recovery and continued real estate market stagnation, there are no issues with liquidity or management stability. As of the first quarter of this year, the liquidity ratio of the savings bank industry was 227.3%, more than twice the supervisory standard (100%). During the same period, the capital adequacy ratio based on the Bank for International Settlements (BIS) standards was 14.7%, about twice the regulatory ratio of 7-8%.

A representative of the Korea Federation of Savings Banks stated, "We will continue our self-help efforts to manage liquidity risk and maintain management stability," adding, "We plan to manage the situation stably through close cooperation with financial authorities so that ordinary citizens and small and medium-sized merchants can use our services with confidence."

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