The Financial Services Commission plans to roll out a 13 trillion won financial support program for corporations harmed by the situation in the Middle East.
The Financial Services Commission (FSC) on the 4th held an emergency meeting to review financial market conditions, chaired by Chairperson Lee Eog-weon. The meeting was arranged to review market conditions with the Financial Supervisory Service and financial market experts as volatility in Korea's stock market has been increasing following the recent situation in the Middle East.
The Financial Services Commission (FSC) plans to provide new funding to corporations harmed by the situation in the Middle East through a 13.3 trillion won financial support program operated by Korea Development Bank, Industrial Bank of Korea (IBK), and Korea Credit Guarantee Fund (KODIT). In addition, for existing loans and guarantees, the FSC will implement a full one-year maturity extension to minimize liquidity strains for corporations.
The financial support program consists of 8 trillion won from Korea Development Bank, 2.3 trillion won from Industrial Bank of Korea (IBK), and 3 trillion won from Korea Credit Guarantee Fund (KODIT), and includes support for facility funds and operating funds as well as interest rate reductions of up to 1.3 percentage points (p).
In particular, policy finance institutions such as Korea Development Bank, Industrial Bank of Korea (IBK), and Korea Credit Guarantee Fund (KODIT) requested indemnification for responsible officers in the process of promoting new liquidity supply to corporations harmed by the situation in the Middle East and extending maturities of existing loans and guarantees, as was done during the similar situation of the Russia-Ukraine crisis in Mar. 2022. Under the relevant regulations, indemnification for responsible officers will be applied immediately if there is no intent or gross negligence.
Under the relevant regulations, officers are not sanctioned for financial support tasks such as loans, guarantees, investments, and extensions of repayment deadlines that are implemented in consultation with the government for the purpose of stabilizing financial markets.
The Financial Services Commission (FSC) also plans to actively operate the currently running 100 trillion won plus alpha market stabilization program if excessive market volatility occurs, while closely monitoring market trends with relevant agencies.
The Financial Services Commission (FSC) plans to continue operating a 24-hour monitoring system and to closely share developments related to the Middle East with relevant agencies through the financial market team until the financial market stabilizes.