Yoo Jae-hoon: "Deposit Insurance 3.0 Era... Need to Expand Protection Coverage and Strengthen Financial Institutions' Responsibility"

President Yebo's 100-Day Inauguration Press Conference

Yoo Jae-hoon, President of the Korea Deposit Insurance Corporation (KDIC), stated on the 8th that regarding the future of the deposit insurance system, it should go beyond the current system limited to principal and interest guarantees and be able to encompass non-deposit financial products as well.

On the 8th, Yoo Jae-hoon said, "KDIC is facing three changes: the revision of the depositor protection limit in August, the termination of the special account created for savings bank restructuring in 2026, and the end of the repayment period for the special contributions made during the foreign exchange crisis in 2027," explaining this.

President Yoo described the period when the government’s finances were relied upon to resolve insolvent financial institutions as 'Deposit Insurance 1.0,' and the period during the savings bank restructuring when funds were borrowed from other accounts such as banks to cover costs as 'Deposit Insurance 2.0,' referring to the future deposit protection system as 'Deposit Protection 3.0.'

He emphasized, "The essence of Deposit Protection 3.0 is to strengthen financial companies’ crisis response capabilities, while enabling financial companies to manage bankruptcy risks on their own and thereby protect depositors. It is also about creating a more incentive-compatible system as the operating principle of the deposit insurance fund."

Accordingly, KDIC has decided to first expand the scope of protection for financial products. After introducing overseas cases, President Yoo said, "Comparing the growth rate of deposits and non-deposit financial products over the past 10 to 20 years, the latter has naturally grown faster, and its scale has reached a level comparable to deposits. In this context, the current system is only a half-measure from the perspective of protecting financial consumers. The government has announced a separate protection plan for pension savings, which is a small but meaningful step."

Furthermore, KDIC will continue to promote the establishment of a future-oriented deposit insurance system based on proactive financial crisis prevention, self-responsibility, and mutual aid principles.

Meanwhile, regarding the immediate issue of expanding the depositor protection limit, President Yoo said, "Raising the depositor protection limit is an issue like a sweet potato stem," adding, "We are preparing a calculation formula through a public-private joint task force (TF) and are getting ready to respond when related discussions take place in the National Assembly."

Regarding the sale of KDIC’s stake (1.29%) in Woori Financial Group, he said, "We will make a decision based on market conditions," and added, "If market conditions improve, we believe the Korean stock market can absorb it at any time."