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SOUTH KOREA
SOUTH KOREA: Fitch: South Korea's Key Policy Banks - Countercyclical Policy Role
Stands Out Amid the Coronavirus-Triggered Downturn
- South Korea's three policy banks are the key institutions to implement the
KRW175 trillion support package that the Korean authorities have announced to
restore the stability of financial markets amid the coronavirus pandemic. The
key policy banks' extensive credit supply in times of significant disruptions in
the economy and financial markets should ease the risk of a sharp deterioration
in the financial profiles of commercial banks. The countercyclical role of these
three policy banks is being called upon again during this coronavirus-induced
economic recession, similar to the previous economic woes such as the 2008
global financial crisis. Another major avenue through which their policy role is
executed is their participation in stabilisation funds (eg the Bond Market
Stabilisation Fund) set up by the government. We expect the government to boost
the support measures further via the key policy banks if disruption deepens in
the economy and financial markets.
- Link: https://tinyurl.com/ybx99hhy
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com