Chairperson Lee Eog-weon of the Financial Services Commission said on the 8th that writing off long-term arrears bonds would be a starting point for restoring a virtuous cycle in the economy.
The Chairperson said in congratulatory remarks at the "New Leap Fund incineration ceremony" held at KAMCO Maru in the Busan International Finance Center that it would be "a starting point for people whose economic activity was constrained by arrears to once again support normal economic activity, restore a virtuous cycle in our economy, and further practice respect for humanity and social solidarity."
The Chairperson said, "More than half of the bonds written off today were in arrears for over 20 years," adding, "It makes me think again whether the pain of arrears that people endured was not excessively long."
The Chairperson promised to review statutes of limitations practices and procedures, saying, "From now on, the financial sector will not customarily extend the statute of limitations on arrears bonds when there is no possibility of recovery, so as not to hinder debtors' return to economic activity over a long period."
The government in Oct. purchased 5.4 trillion won (about 340,000 people) in arrears bonds from the Korea Asset Management Corporation (KAMCO) and the National Happiness Fund. Then on the 27th, it additionally bought 800 billion won in long-term bonds held by banks, life insurance companies, and lending companies. Of these, about 1.1 trillion won worth of long-term arrears bonds held by 70,000 people were written off for the first time on this day.
However, the Chairperson said that because the New Leap Fund is a policy that uses taxpayer money, "We will ensure that only those truly in hardship can receive support." To that end, the Chairperson said the National Assembly's Credit Information Act amendment would be supported so the New Leap Fund can also review debtors' financial and virtual asset information. The New Leap Fund plans to acquire claims in bulk from contracted financial companies through next year. The total purchase size of long-term arrears bonds is estimated at 16.4 trillion won, with a total of 1,134,000 beneficiaries.