'Continued Uncertainty' Kim Byunghwan: "Revitalizing Corporate Finance... Considering Direct Support for Mid-sized Companies' Corporate Bond Issuance"

Chairman Kim Presides Over 'Corporate Finance Situation Review Meeting'
High Exchange Rates and Domestic-External Uncertainty Persist... "Proactive Response to Corporate Finance Concerns"
Regulatory Easing Including Postponement of Stress Buffer Capital Introduction and Improvement of Risk Weight Application Standards
Full-Scale Supply of Low-Interest Semiconductor Loans in the 2% Range Through Korea Development Bank
Plans to Expand Regional Specialized Venture Platforms and Strengthen Links with Policy Institutions

Amid ongoing domestic and international uncertainties caused by President Yoon Suk-yeol's emergency martial law situation and impeachment political turmoil, along with a sustained high exchange rate trend, the Financial Services Commission (FSC) held an emergency review meeting with policy financial institutions and private companies. Following the postponement of the introduction of stress buffer capital, the FSC announced plans to accelerate additional regulatory easing. Furthermore, new programs will be launched, including the full-scale supply of low-interest semiconductor loans at around 2% comparable to government bonds through the Korea Development Bank, and the review of support measures for direct corporate bond issuance by high-quality mid-sized companies.

Financial Services Commission Chairman Kim Byung-hwan is giving an urgent briefing on current issues at the Financial Services Committee held by the National Assembly's Political Affairs Committee on the 18th. Photo by Kim Hyun-min

On the 17th, the FSC, chaired by Chairman Kim Byung-hwan, held a 'Corporate Finance Situation Review Meeting' at the Bankers Association in Myeong-dong, Seoul, to discuss the recent funding status of domestic companies and future response strategies. Participants included experts from the Korea Development Bank, IBK Industrial Bank, Export-Import Bank of Korea, Korea Credit Guarantee Fund, and NICE Credit Rating. Private companies such as SK Hynix, Hanwha Solutions, Hanon Systems, Samki EV, Jigecha Bank, and Etiphos also participated.

Chairman Kim emphasized that although the corporate funding market has generally remained stable despite recent political situations, proactive measures are necessary due to some concerns that companies' financing conditions are becoming difficult amid domestic and international circumstances.

First, he conveyed the intention to support the expansion of corporate finance by alleviating banks' soundness burdens through measures such as postponing the introduction of stress buffer capital and improving risk-weighted asset application standards, and to promote swift legislation on key economic bills in cooperation with the National Assembly.

Chairman Kim explained, "We plan to faithfully fulfill the role of policy finance as a catalyst, actively reflecting the opinions of industrial ministries in next year's policy finance supply plan to sufficiently provide funds to priority sectors, and to expand investment support for innovative technologies and companies, which are future growth engines."

He then urged commercial banks, saying, "When establishing next year's business plans, please play a role in stabilizing the real economy," and requested, "Please consider innovative funding support methods that shift from the 'household and real estate' sector to 'corporate and growth capital,' and from 'debt-centered' to 'investment-centered' approaches."

Experts attending the meeting forecast that the macroeconomic environment, including exchange rates and interest rates, will remain unfavorable to companies for the time being due to the U.S. presidential election results and ongoing geopolitical conflicts. They suggested the need to monitor the financial status of financially vulnerable small and medium-sized enterprises (SMEs), as well as corporate bond refinancing and new issuance situations. Companies participating in the roundtable requested various financial supports, including expanded funding for advanced and strategic industries, increased issuance scale of primary collateralized bond obligations (P-CBOs), and relief from interest burdens.

Chairman Kim stated, "Next year, we will promote new corporate support programs such as the full-scale supply of low-interest semiconductor loans at around 2% government bond levels through the Korea Development Bank, review support measures for direct corporate bond issuance by high-quality mid-sized companies, expand region-specific venture platforms, and strengthen linkage with policy institutions."