Financial Services Commission Activates '100 Trillion Plus Alpha' Program as Middle East-Driven Stock Plunge Hits... One-Year Loan Extension for Affected Companies

Lee Eogwon, Chairman of the Financial Services Commission, convened an emergency meeting and reaffirmed the plan to activate a market stabilization program worth over 100 trillion won after the domestic stock market plummeted due to heightened instability in the Middle East following a U.S. airstrike on Iran. For companies affected by this incident, all loans and guarantees provided by Korea Development Bank, Industrial Bank of Korea, and Korea Credit Guarantee Fund will be fully extended for one year upon maturity.

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At 3 p.m. on March 4, Chairman Lee held an emergency financial market situation review meeting with the Financial Supervisory Service and market experts, stating, "In light of the recent situation in the Middle East, stabilizing the financial markets and minimizing the impact on the real economy are of utmost importance."

The meeting was convened amid heightened financial market volatility, as the KOSPI dropped by 12% and the won-dollar exchange rate surged by 39.8 won.

Participants identified the main causes of increased stock market volatility as the expansion of geopolitical risks related to the Middle East, as well as profit-taking following a period of strong market gains. However, they agreed that strong corporate earnings forecasts, policies to invigorate the capital markets, and continued capital inflows provide upward momentum for the stock market, thereby making a sustained downward trend unlikely.

Chairman Lee instructed, "Closely monitor market trends and proactively operate the current '100 trillion won plus alpha' market stabilization program in the event of excessive volatility." He also warned, "Closely monitor for market-disrupting activities and the spread of fake news that exploit increased stock market volatility. Any violations will be met with zero tolerance and strict punishment."

The government has also decided to strengthen financial support for companies harmed by the Middle East situation. All existing loans and guarantees provided by Korea Development Bank, Industrial Bank of Korea, and Korea Credit Guarantee Fund to affected companies will be fully extended for one year upon maturity. This measure follows the previous day's activation of a 13.3 trillion won financial support program through these institutions.

Additionally, for new liquidity provisions and extensions of existing loans and guarantees by Korea Development Bank, Industrial Bank of Korea, and Korea Credit Guarantee Fund to affected companies, immediate immunity will be granted to responsible staff in the absence of intent or gross negligence.

The Financial Services Commission stated, "Until the financial markets stabilize, we will continue to maintain a 24-hour monitoring system and closely share updates on the Middle East situation with relevant agencies through the Financial Market Response Team."

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