Hong Ik-pyo "Special Law Needed to Suspend Interest in Financial Industry"

Designation of Financial Sector for Profit-Sharing System
Emphasis on the Need for Temporary Special Legislation

[Image source=Yonhap News]

[Asia Economy Reporter Koo Chae-eun] The Democratic Party of Korea has identified the financial industry as the main target of the COVID-19 profit-sharing system. They argue that there is a need to create a temporary special law for sharing pain, such as suspending or limiting interest payments and prohibiting provisional seizures.

Hong Ik-pyo, chairman of the Democratic Party's Policy Committee, appeared on KBS Radio's "Kim Kyung-rae's Strongest Current Affairs" on the 19th and said, "The gap between the financial sector and the non-financial real economy is widening significantly," adding, "This is a global phenomenon, and the biggest industry benefiting even during the COVID-19 situation is the financial industry. It's not just about reducing and stopping rent; interest payments by banks should also be stopped or limited."

He also said, "There should be a social movement to stop credit rating downgrades that increase interest burdens, as well as provisional seizures and mortgages, for this year. If necessary, it should be considered even through a temporary special law."

This reflects the view that while small business owners and self-employed individuals are crushed under the burden of rent, only the financial sector is profiting. Hong said, "The reason the 'Good Landlord' movement did not succeed is that many landlords have bank debts and must pay interest," emphasizing, "All other economic activities have stopped or been restricted, but interest continues to be collected. The base interest rate is 0.5%, so in unavoidable cases like rent, interest should be lowered or suspended."

He also urged the financial sector to participate in fund formation. Hong said, "The financial labor union has already created and is utilizing such funds. First is voluntariness, and second is approaching through legalizing incentives based on social consensus."

Regarding disaster solidarity taxes mentioned as part of the profit-sharing system, he drew a line, saying, "Currently, it is not being considered." Hong added, "We do not completely close the possibility of taxes, but it is an issue to be considered at the last moment." He continued, "If a fund is created and meaningful social activities take place, and there is a national consensus to even include taxes, then discussions can be held. But taking the easy path of immediately collecting taxes is not the right answer."