[Fitch Rating highly praises Korea’s effort to stabilize financial system and support SMEs]

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According to a recent report by Fitch Ratings on Korea’s policy financial institutions, Korea stands out among developed nations in terms of policy banks and non-bank policy financial institutions’ roles to support the financial system and SMEs.

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The report notes, “Korea stands out among developed markets in terms of policy banks and non-bank policy FIs performing such significant roles in the financial system.”

Moreover, regarding the increasing role of Korea’s policy banks and non-banking financial institutions the report states that “Fitch expects the importance of Korea’s policy banks…to increase, fulfilling government initiatives to support small and medium-sized enterprises (SMEs) and to create new jobs, thereby benefiting the broader economy. Furthermore, policy banks should continue to play an important role supporting distressed corporates, including those in weak sectors such as shipbuilding, shipping and construction,” “Fitch also expects various non-bank policy FIs to continue to grow rapidly, as they play numerous policy roles: supporting housing market stability, providing household welfare for financially disadvantaged individuals, servicing SMEs and supporting weak sectors,” “Fitch expects them to continue to play a critical role meeting the funding needs of important sectors, especially the manufacturing industry, in order to facilitate Korea’s export-led economic development.”

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The report also pointed out that the Korean government is more active in participating in the financial system and supporting SMEs than most other developed nations. “The government of South Korea is one of the most active among its international peers in terms of participation in the financial system via multiple policy FIs,” “Korea’s economy (and therefore its commercial banks) has benefited from the stability of domestic corporates amid the slowing global economy. Korea’s government is more active than most other developed countries in supporting SMEs.”

The Fitch report applauded Korean government’s efforts to stabilize financial system and boost SME growth, as well as to facilitate Korea’s export-led economic development. The report illustrates in detail the introduction and roles of all policy banks and non-policy financial institutions of Korea.

The ten-page-long report is available on http://www.fitchratings.com.

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