The five major financial holding groups and banks will provide 53 trillion won+α to support domestic corporations hit by high oil prices and a strong dollar due to the prolonged U.S.-Iran war. The government also decided to release 24.3 trillion won in policy finance.
On the 30th, a financial sector meeting was held, presided over by Chairperson Lee Eog-weon of the Financial Services Commission (FSC), to activate an emergency response system in the financial sector related to the Middle East situation. At the meeting, the Financial Supervisory Service and policy finance institutions, along with the private financial sector, reviewed financial market trends following the Middle East situation and discussed response plans in finance, including support for livelihoods and the real economy and financial market stabilization.
To support funds for livelihoods and the real economy, the government will supply 24.3 trillion won for a "policy finance support program" for affected corporations and partner firms. This is 4 trillion won more than the existing supply scale. The Financial Services Commission (FSC) also decided to consider further expanding support funds depending on how quickly the program is used.
The five major financial holding groups and the banking sector, including KB, Shinhan, Hana, Woori, and NH Nonghyup, will provide 53 trillion won+α in new funds to support affected corporations. They will also support extensions of maturities and deferrals of repayment on existing loans for affected corporations, as well as cuts to foreign exchange fees and interest rates. The insurance sector will push measures such as auto insurance premium discounts, premium payment deferrals, and expedited insurance payouts. Card companies also decided to provide additional support for public transportation fares on transit-focused cards, extra discounts on fuel-focused cards, and deferrals of principal repayment on installment financing for cargo trucks.
The Korea Development Bank and the Export-Import Bank of Korea will support liquidity for the Korea National Oil Corporation (KNOC) to secure crude oil.
For vulnerable groups such as low-income people and small business owners, whose difficulties may be exacerbated by rising prices, low-interest policy finance products will be provided. The Financial Services Commission (FSC) will supply 10 trillion won in loans for low-income people and small business owners, including the Small Business Owners The Dream package.
The financial authorities will form an emergency response task force (TF) in the financial sector with participation from policy and private finance and will monitor domestic and overseas market trends 24 hours a day. They will also actively execute a 100 trillion won+α market stabilization program to stabilize the capital market.
Chairperson Lee said, "As the Middle East war has continued for more than four weeks, a grave situation has emerged in which complex shocks could expand across the financial market and the entire livelihoods and real economy," adding, "The government has preemptively activated a pan-government 'emergency economic response system' to respond to the potential for a major crisis, and it is time for the financial sector to maintain a seamless state of readiness, including for the worst-case scenario."