Hello, everyone! How have you been all? I’m sure some of you may have heard about the financial holding companies’ meeting with the FSC’s Chairman Mr. Kim Seok-Dong, on 21st of August.
The heads of financial holding companies and Mr. Kim gathered around to improve the current financial system by seeking the way to maintain financial stability. Today I would like to introduce some measures addressed in the meeting.
The government authorities have made consistent efforts to support ‘Comprehensive Measures on Soft-Landing of Household Debts’. Each financial holding company has its own system to support the low-income households. For instance, as you can see from the chart below, there has been a rise in the number of applicants for the pre-workout since 2009.
Then, what is the ‘pre-workout’? Let me explain it simply. Pre-workout is the system to help borrowers by allowing the extension of debt maturity, reducing the default interest, and so on. These methods of pre-workout are expected to prevent the borrowers from becoming bankrupt.
Mr. Kim emphasized the importance of ‘recovering trust’ for financial sectors. “Trust is the vital thing to be pursued by financial industries. Once lost, it is difficult to regain trust. This means that recovering trust requires financial holding companies to actively cooperate and find out possible measures”, Mr. Kim said.
Mistrust of financial sectors has recently deepened, with the issue of the Certificate of Deposit (CD) rate. Responding to the current issue questioning transparency in financial sectors, an alternative benchmark index rate, COFIX, was introduced by FSC. COFIX is to gradually replace the CD, and this new measure is the result of FSC’s efforts in cooperation with other related bodies. As well as this effort, financial authorities keep making efforts to firmly build trust and promote transparency. By the way, if you want to know more details about COFIX, please visit FSC homepage for the Press Release material (http://www.fsc.go.kr/eng/index.jsp)
I hope that this meeting is not just one-off communication between Mr. Kim and the representatives of financial holding companies. Rather, the measures discussed are to be implemented in a way which positively contributes to our financial system and each of us!