Financial Services Commission: "Support for Large Corporations Requires Self-Help First... Difficult to Offer Better Conditions than the Market"

Son Byung-du, Vice Chairman of the Financial Services Commission (Provided by the Financial Services Commission)

[Asia Economy Reporter Kim Hyo-jin] Financial authorities reaffirmed the policy that corporate self-help efforts take priority in support for large corporations affected by the novel coronavirus disease (COVID-19).

On the 2nd, Sohn Byung-doo, Vice Chairman of the Financial Services Commission (FSC), held a conference call with the Bank of Korea, Financial Supervisory Service, Industrial Bank of Korea, Korea Eximbank, Korea Credit Guarantee Fund, and Korea Credit Guarantee Foundation to announce this policy.

Vice Chairman Sohn stated, "For large corporations, market-based financing should come first, and corporate self-help efforts must precede," adding, "Companies should make every effort to first raise funds in the market by maximizing the use of internal reserves and available assets."

He explained that government support programs find it difficult to offer better conditions than the market in terms of interest rates, guarantee fees, and maturities.

Vice Chairman Sohn also revealed plans to prioritize supply performance over 'profitability' in management performance evaluations to ensure smooth financial support from policy financial institutions to small and medium-sized enterprises (SMEs) affected by COVID-19. The FSC plans to revise the 'Financial Public Institution Management Performance Evaluation Guidelines' within this month to this end.

Regarding the short-term money market, Vice Chairman Sohn assessed that "despite liquidity concerns, the market situation at the end of the first quarter was more stable than expected."

He forecasted that although uncertainties will continue, the Bond Market Stabilization Fund will serve as a market safety net.

While expressing gratitude to individual investors who have continued their buying spree in the stock market, Vice Chairman Sohn urged, "Given the significantly increased volatility and uncertainty in the stock market, please refrain from indiscriminate investments and leveraged trading."