On the 28th, the Financial Services Commission noted that it would monitor the real-time deposits status of the mutual financial sector ahead of raising the deposit protection limit to 100 million won.
On the same day, the Financial Services Commission held a policy council meeting for mutual finance chaired by Secretary-General Kwon Dae-young and announced this plan. From September 1, the deposit protection limit for the entire financial sector, including mutual finance, will be increased from the existing 50 million won to 100 million won. The council meeting checked the preparations of the mutual finance sector before the increase in the deposit protection limit and discussed future response directions.
The Financial Services Commission believes that, even if funds concentrate in the mutual finance sector after the system is implemented, the scale of fund transfers for individual financial institutions will differ. Accordingly, the Financial Services Commission plans to conduct concentrated monitoring, focusing on associations with weak liquidity and soundness. Additionally, the commission plans to aggregate the fluctuations of the entire associations' deposits in real-time through the deposits management system and share that information with relevant institutions. In the event of a liquidity crisis in a specific association, central funds will be prioritized for injection, and if the crisis persists, the Bank of Korea will provide liquidity support.
Secretary-General Kwon said, "Excessive competition for deposits leads to another risk of interest rate distortion and deterioration of soundness," urging that fund transfers should not act as a burden on the mutual finance sector.