Saneun, Capital Market Stabilization Meeting... "Listening to Requests for Expansion of Support Targets"

Meeting Held with Related Organizations in the Capital Market

[Asia Economy Reporter Park Sun-mi] On the 14th, the Korea Development Bank (KDB) announced that it held a meeting with related capital market institutions such as issuers, securities firms, credit rating agencies, and the Capital Market Research Institute to listen to opinions and suggestions on the operational performance of the COVID-19 related capital market stabilization policy programs.

Since launching the refinancing support program for corporate bonds and commercial papers (CP) in March last year, KDB has been implementing policy programs including the Bond Market Stabilization Fund (participation of 84 financial institutions), the Rapid Underwriting System for Corporate Bonds (participation of 19 financial institutions), and the Corporate Liquidity Support Organization (KDB, Bank of Korea). Through these efforts, it has supported the resolution of liquidity shortages in the bond market caused by the spread of COVID-19 and improved corporate financing conditions, achieving a total support performance of 8.8 trillion KRW.

Participants evaluated that the policy programs had a market stabilization effect by lowering and stabilizing credit spreads of corporate bonds and CPs, increasing the effective competition rate in corporate bond demand forecasts through the recovery of investor sentiment, and net issuance.

However, considering the ongoing uncertainty in COVID-19 quarantine situations and the real economy, as well as concerns over increased financial market volatility, they suggested the need to maintain the current financial support stance and improve the system by expanding the support targets. Regarding this, Yang Ki-ho, head of the Capital Market Division at KDB, stated, "We will actively reflect the opinions and suggestions raised at the meeting in improving existing programs and operating policy programs in case of a recurrence of crisis situations," adding, "We will continue to support capital market stabilization and help companies overcome COVID-19 through close communication with the market."