Financial Services Commission: "Large Corporations Must Prioritize Self-Help Efforts Such as Market Fundraising" (Comprehensive)

Reconfirmation of Financial Support Principles for Large Corporations Including Financial Companies

[Asia Economy Reporter Kangwook Cho] Financial authorities have once again emphasized the principle that self-help efforts, such as raising funds in the market, must precede government support for large corporations.

On the 3rd, the Financial Services Commission (FSC) held a market inspection meeting chaired by Chairman Eun Sung-soo and reaffirmed the principles of financial support for large corporations as a follow-up measure to the 'Financial Market Stabilization Plan.'

The FSC stated that unlike small business owners and small and medium-sized enterprises (SMEs), when financial companies including large corporations with market access seek to use government support programs, they must first make self-help efforts by maximizing the use of internal reserves and available assets and primarily raising funds from their transaction banks and the market.

The corporate finance support program included in the Financial Market Stabilization Plan aims primarily to restore the financial market system so that the financial market can function properly, enabling companies to raise the necessary funds from the market.

Furthermore, the FSC explained that if these efforts prove insufficient, government support programs may be used, but similar to foreign cases such as the U.S. Fed and CPFF, there is an unavoidable aspect of bearing certain burdens in terms of interest rates, guarantee fees, and maturities. It is difficult to offer conditions better than the market.

The FSC emphasized, "Ultimately, if self-help efforts and government support programs are insufficient, policy financial institutions will decide whether to provide support by comprehensively considering the individual large corporation's self-help efforts, liquidity, and financial situation."

Earlier, the government set a policy at the 2nd Emergency Economic Meeting last month to prevent corporate bankruptcies caused by the impact of the novel coronavirus disease (COVID-19). Accordingly, large corporations were also included in the support targets of the livelihood and financial stabilization program, which exceeds 100 trillion won in scale.

Regarding the aviation industry, which has recently been facing difficulties, the FSC stated, "We are closely monitoring the current management status of the aviation industry," and added, "We are working closely with related ministries, including the Ministry of Land, Infrastructure and Transport, the competent ministry, to review necessary measures."