A few days ago, our mighty Frank wrote several posts about the FSC Chairman’s meeting with financial holding companies. Well, those posts got my attention, and I’d like to add some more :P. The Chairman Mr. Kim addressed the following points.
To stabilize the financial system, responses to crisis need to be done not only promptly, but also ‘in advance’. That is, our financial system should be prepared by proper measures beforehand, no matter how chaotic crisis is out there! There have been such efforts made by the financial sector, as clearly shown from the remarkable improvement in matters like foreign exchange liquidity. It’s important that we secure a certain amount of foreign exchange reserves which can work as like an ‘airbag’ in the event of crisis. This means that holding foreign exchange reserves is kind of a cushioning system to absorb the exterior shocks in international economy. The more foreign exchange reserves are secured, the less likely Korean market is affected by fluctuations of the global financial crisis. However, since nobody knows how long the current global crisis will go on, we still need to back up our plan with other possible measures such as financial support for low-income households and SMEs.
Along with the financial stability, supporting low-income households and SMEs has been the point of debates. “Despite the previous measures by the financial sector trying to alleviate their financial difficulties, the low-incomers and SMEs might still feel that they’re stuck in an endless tunnel with no light, considering the current economic downturn”, the Chairman Mr. Kim said. For the competitive SMEs not to go bankrupt due to a temporary shortage in financial liquidities, there should be an appropriate financial support for SMEs. As for the low-income households, the government and financial sectors worked together to prepare 『Enhancement measure to support low-incomers』, on 19th July. This measure is expected to help those low-income earners by providing financial support in a practical manner.
I wish that all of these measures come together and bring a good result, as hoped. It might take a while to see how effective the measures are. Have a nice day everybody, and I’ll be back next time:D!