South Korea’s five major financial holding companies pledged a total of 95 trillion won ($67 billion) by the end of this year to help stabilize the credit market, responding to a request of the regulator.
The heads of KB Financial Group Inc., Hana Financial Group Inc., Shinhan Financial Group Co., Woori Financial Group Inc. and NongHyup Financial Group Inc. made the commitment when they met with Financial Services Commission Chairman Kim Joo-hyun, the regulator said in a statement on Tuesday.
With yields on commercial paper spiking to levels not seen since the global financial crisis after a real estate developer’s default, Korean authorities have deployed a various measures to stabilize the market, including an
aid package of 50 trillion won.
HERE’S A BREAKDOWN OF THE 95 TRILLION WON PLEDGED: | |
---|
Supplying liquidity in markets | 73 trillion won |
Stabilization funds for stocks, bonds | 12 trillion won |
Providing financing for affiliates | 10 trillion won |
Total | 95 trillion won |
The 95 trillion won in support will contribute to that aid fund. Initiatives include financing for Korea Electric Power Corp. and other SOEs as well as buying asset-backed commercial paper and debt issued by companies. Banks will also maintain credit lines for non-bank financial companies and participate in stabilization funds for stocks and bonds, which were previously announced.
The FSC chairman, heads of financial holding companies and the chairman of Korea Federation of Banks will meet on a regular basis for cooperation until the market is stabilized, the statement said.