40 Trillion Won Draft Fund Launch "Fund Is Not a Privilege... Timely Support Is Important" (Comprehensive)

Inauguration Ceremony at KDB Headquarters on the 28th... Appointment of 7 Members to the Ki-An Fund Management Deliberation Committee
Eun Seong-su, Financial Services Commission Chairman: "One of the Most Important Values of the Fund is Employment Stability"
Lee Dong-geol, KDB Chairman: "The Fund Will Serve as a Strong Breakwater for Key Industries"

Eun Sung-soo, Chairman of the Financial Services Commission, is delivering a congratulatory speech at the launch ceremony of the Industrial Stabilization Fund held at the headquarters of the Korea Development Bank in Yeouido on the 28th.

[Asia Economy Reporter Kangwook Cho] The 40 trillion won-scale Industrial Stabilization Fund (ISF), aimed at safeguarding the foundation of our economy and jobs, has officially launched. The ISF plans to first provide liquidity to key industries such as aviation and shipping, which have been hit hard by the COVID-19 pandemic.

On the 28th, the Korea Development Bank (KDB) held a launch ceremony for the Industrial Stabilization Fund at its headquarters in Yeouido, Seoul, attended by Eun Sung-soo, Chairman of the Financial Services Commission, Lee Dong-geol, Chairman of KDB, and members of the Fund Management Committee. They announced the start of full-scale efforts to enhance the competitiveness of key industries.

In his congratulatory speech, Chairman Eun said, "The economic situation in our country is like an economic wartime scenario, with the real economy recession and employment crisis caused by COVID-19 spreading not only to the service and manufacturing sectors but across all industries." He emphasized that "timely financial support to companies is of utmost importance."

He highlighted three goals: timeliness, sufficiency, and employment stability. Support must be provided without delay, funds should be supplied in sufficient amounts to companies in need, and, as the official name suggests, employment stability is one of the most important values.

Chairman Eun also urged for harmony and balance among these goals.

He stated, "As the devil is in the details, while everyone agrees on the general principles of timeliness, sufficiency, and employment stability, conflicts may arise when it comes to specifics. I ask the committee members to exercise wisdom and insight to find a reasonable balance and harmony."

Regarding controversies over eligibility for fund support, Chairman Eun dismissed the notion that "this fund is not a special privilege," emphasizing, "Therefore, even if a company is not eligible for support, necessary assistance will be provided according to the company's circumstances within the framework of the livelihood and financial stability package program."

In his commemorative speech, Chairman Lee Dong-geol said, "Since the fund was established based on national consensus, government efforts, and active cooperation from the National Assembly, there are expectations to minimize economic shocks. However, there are many concerns about which companies and industries will receive support and whether necessary funds will be provided sufficiently and timely." He urged the committee members to cooperate so that the Industrial Stabilization Fund can serve as a strong breakwater protecting Korea's key industries.

The Fund Management Committee, responsible for overseeing and operating the ISF, consists of seven members: two recommended by the National Assembly, and one each recommended by the Ministry of Economy and Finance, Ministry of Employment and Labor, Financial Services Commission, Korea Chamber of Commerce and Industry, and KDB Chairman. The selection of companies eligible for ISF support will be determined by the Fund Management Committee members recommended by the National Assembly and relevant ministers.

The newly appointed members include financial expert Oh Jung-geun, who has served for many years at the Bank of Korea and currently chairs the Korea Financial ICT Convergence Society; Professor Kim Sung-yong, a leading academic in corporate restructuring systems; Kim Joo-hoon, a renowned researcher in domestic manufacturing at KDI; labor policy expert Roh Kwang-pyo, director of the Korea Labor and Society Institute; Lee Sung-kyu, former CEO of Korea Asset Management Corporation (KAMCO) who handled corporate restructuring after the IMF bailout; Professor Shin Hyun-han of Yonsei University, author of "CEOs, Become Financiers!," specializing in corporate finance; and Kim Bok-gyu, Vice President of KDB and corporate finance expert.

The committee members explained the fund’s operational direction, stating, "We will check compliance with conditions to support projects expected to be necessary even after the COVID-19 crisis ends," "Companies that were already deteriorating before the COVID-19 crisis must have labor-management agreements on restructuring and business reorganization, and support will be provided only when such agreements are implemented," and "We must draw a clear line against providing special privileges to insolvent companies."

At the first meeting held after the launch ceremony, deliberations were conducted on the fund’s internal regulations, operational plans, and the issuance limit of ISF bonds amounting to 40 trillion won.