Seungbeom Ko Meets with Chairpersons of Top 5 Financial Companies on the 10th... What Will They Discuss?

Likely to Urge COVID-19 Financial Support and Household Debt Response

Financial Services Commission Chairman Ko Seung-beom is moving on the 3rd to meet with Bank of Korea Governor Lee Ju-yeol at the Bank of Korea in Jung-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kim Jin-ho] Financial Services Commission Chairman Ko Seung-beom will hold a meeting with the heads of the five major financial holding companies on the 10th. Following Financial Supervisory Service Governor Jung Eun-bo and Bank of Korea Governor Lee Ju-yeol, this meeting is expected to broaden communication and seek cooperation for the re-extension of COVID-19 related financial support measures.

According to the financial sector on the 5th, Chairman Ko will hold a roundtable meeting on the 10th at the Bankers' Hall in Myeong-dong, Seoul, with the heads of the five major financial holding companies: Yoon Jong-kyu of KB Financial Group, Cho Yong-byoung of Shinhan Financial Group, Kim Jung-tae of Hana Financial Group, Sohn Tae-seung of Woori Financial Group, and Sohn Byung-hwan of NH Nonghyup Financial Group, to discuss current issues in the financial industry.

This meeting, which also serves as a courtesy visit, is the first official gathering with financial holding company heads since Chairman Ko's inauguration. It is expected to cover measures to strengthen management of the rapidly increasing household debt and the possibility of re-extending the loan maturity extension and interest payment deferral measures for small business owners and self-employed individuals, which are set to expire at the end of this month.

Chairman Ko indicated the re-extension of 'COVID financial support' as his first policy after taking office on the 31st of last month. Considering the difficulties faced by self-employed individuals and small and medium-sized enterprises due to intensified social distancing measures, he believes that 're-extension is inevitable.'

According to the financial sector, the plan to re-extend loan maturities for self-employed individuals and others by six months, as before, is being strongly considered. However, the interest deferral measure is being considered for discontinuation. Since the scale is only about 200 billion won, stopping it immediately is not expected to worsen the difficulties of small business owners.

Cooperation for household debt management is also expected to be requested. Since Chairman Jung Eun-bo of the Financial Supervisory Service and Governor Lee Ju-yeol of the Bank of Korea agreed to actively cooperate in responding to household debt during their meetings, it is highly likely that financial companies will be asked to participate.

Recently, a so-called 'balloon effect' has occurred beyond the banking sector into the secondary financial sector, and financial authorities are expected to urge stable management to achieve the targeted household debt growth rate (5-6%). However, they are expected to demand that so-called real demand borrowers are not harmed due to restrictions on jeonse loans and others.