Yu Jae-hoon, President of the Korea Deposit Insurance Corporation, said on the 18th that regarding the agreement between the ruling and opposition parties to raise the deposit insurance coverage limit from the existing 50 million won to 100 million won, "We plan to analyze the implementation methods and pros and cons of each proposal and prepare the optimal plan."
At a year-end press conference held at the Press Center in Jung-gu, Seoul, Yu said, "The political agreement between the ruling and opposition parties to raise the deposit insurance coverage limit to 100 million won has now become a feasible task in reality."
He added, "What remains is the issue of when and how to raise the deposit insurance coverage limit. This part is being discussed by the government with the ruling and opposition parties, so we do not know, but as reported, I understand that various appropriate alternatives are being explored."
Yu also seemed aware of the unfavorable atmosphere toward raising the deposit insurance coverage limit, citing concerns such as the possibility of sudden money movement in banking and mutual savings banks sectors and the increase in deposit insurance premiums. He said, "There still seems to be some skepticism or concerns about whether the 100 million won limit increase is absolutely necessary and about its negative impacts," adding, "We will explain in detail why the 100 million won limit is needed, its significance, and how the so-called side effects will be resolved."
He reiterated the necessity of the 'Financial Stability Account,' which failed to be legislated in the 21st National Assembly. Yu said, "The Financial Stability Account is not something invented and introduced for the first time in Korea; advanced countries have been operating this system for over ten years since the global financial crisis," adding, "Rather than rushing to introduce it during a crisis, it is appropriate to introduce it when the market is stable by opening and utilizing the existing toolbox."
He continued, "Considering the recent economic and financial situation, this is the time when the Financial Stability Account should be introduced more than ever. Also, since the decision to raise the deposit insurance coverage limit has been made, this system is even more necessary," and said, "We believe that we can review and resolve various technical concerns in advance with the government and report the solutions to the National Assembly and others."
Meanwhile, regarding the stalled sale of MG Insurance, Yu said, "It is because no one wanted it," and added, "There is an option to inject public funds as before, but since that is no longer possible, we are trying to find a solution through the market as much as possible."
Regarding allegations of preferential treatment for a specific financial company, he said, "As a result of multiple failed bids, several potential buyers have recently appeared, and we are in the process of reviewing the selection of the preferred negotiation partner," and drew a line by saying, "I find it puzzling that the term 'preferential treatment' is being used when no specific candidate has been decided."
Regarding the also stalled initial public offering (IPO) of SGI Seoul Guarantee Insurance, he said, "Pursuing the IPO this year in the same way as last year does not seem to be fair to the market," and added, "Considering the changed environment and the increased expectations of IPO investors, I think a bolder value-up is necessary."
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