Financial Sector to Launch Full-Scale New Deal Loans and Investments This Year... "Specific Project Discovery Must Precede"

Discussion on the 'Korean Version (K)-New Deal Support Measures'

On the morning of the 22nd, at the Korea Federation of Banks building in Myeongdong, Seoul, Kim Kwang-soo, Chairman of the Korea Federation of Banks (second from the right), is speaking at the 'K-New Deal Support Measures' meeting. At this meeting, the chairmen of the five major financial groups and heads of financial associations discussed matters related to the Korean New Deal project promoted by ruling party members and the government. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Park Sun-mi] On the morning of the 22nd, heads of financial associations, chairpersons of the five major financial holding companies, financial authorities, and key ruling party officials gathered to discuss the "Korean-style (K)-New Deal Support Plan," where attendees confirmed the financial sector's strong commitment to supporting New Deal projects.

According to the Korea Federation of Banks, the financial sector is currently establishing more concrete support plans based on the New Deal investment guidelines prepared last month, and full-scale loans and investments are expected to begin this year. During the discussion on the K-New Deal support plan held that day, there was a consensus that, given the financial sector's strong willingness to support New Deal projects, as these projects become more concrete, combined with active financial support from the financial sector, tangible K-New Deal outcomes will be rapidly produced.

However, opinions were raised that more specific project discoveries, such as the introduction of pilot projects at the government level, must precede for more efficient financial support. There were also views that the government should bear part of the risks of New Deal projects to reduce risk, and create conditions for more active private investment through tax benefits and easing of capital adequacy regulations. Furthermore, there was agreement that to discover and support high-growth K-New Deal companies, cultivating specialized personnel is essential, and thus there is a need to expand in-house training by linking young employees of financial companies with educational institutions.

At the meeting, it was also shared that the abundant liquidity in the market should flow into more productive sectors by utilizing measures such as the "Innovative Companies National Representative 1000 Comprehensive Financial Support Plan" and the "K-Unicorn Project," with the financial sector making efforts together. Recently, with abundant market liquidity, domestic and foreign funds have been concentrated in commercial real estate, and there was consensus that the financial sector should be cautious about loans for office buildings, and if necessary, risk management systems of financial companies should be used to strengthen risk management for real estate finance.

Meanwhile, the financial sector, centered on the five major financial holding companies, announced loan and investment plans totaling about 70 trillion won last year, thereby preparing K-New Deal financial support plans.