Korean gov't to invest in companies to help them weather Trump

Home > Business > Finance

print dictionary print

Korean gov't to invest in companies to help them weather Trump

Kim Byoung-hwan, chairman of the Financial Services Commission, speaks during a press briefing in Seoul on Jan. 22. [YONHAP]

Kim Byoung-hwan, chairman of the Financial Services Commission, speaks during a press briefing in Seoul on Jan. 22. [YONHAP]

 
The country’s financial regulator is working to create a new fund to help boost industrial competitiveness amid concerns about the impact of the Donald Trump government's policy measures.
 
The Financial Services Commission (FSC) has been in talks with relevant ministries about setting up the new fund under the Korea Development Bank (KDB) to extend support to companies bracing for heated competition in accordance with policy changes under the new U.S. government, according to FSC Chairman Kim Byoung-hwan.
 

Related Article

 
“There have been concerns about our industrial competitiveness regarding the new Trump administration. We will finalize and implement the supportive scheme at an early date,” Kim said at a press briefing in Seoul.
 
A possible scenario is that the FSC raises funds in the form of government-backed bonds and the state-run KDB invests them into special purpose vehicles — entities designed for carrying out specific projects and isolating financial risks —  built by companies.
 
“Making an investment in companies is expected to help ease financial restraints and to have a greater cost-saving effect than extending low-interest loans,” Kim said.
 
The chief also pressed banks to lower lending interest rates, as they have been blamed for being slow to move despite the back-to-back cuts of the benchmark interest rate last year.
 
“Although the key interest rate was lowered twice last year, it is clear that the speed and extent of banks' cuts to lending rates have not been fully reflected,” he added, “Some banks are working to lower their additional interest rates or are considering doing so, and we will continue to monitor and review the situation closely.”
 
As for the issue of rising household debt, Kim said that the regulator aims to keep the growth under 3.8 percent, a figure that sums up this year’s projected inflation and real growth rate.
 
President Donald Trump's return to the White House is expected to have a significant impact on the export-driven Korean economy, as he has warned of protectionist policies, decoupling from China and other drastic policy shifts across the board. 

BY PARK EUN-JEE, YONHAP [[email protected]]
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)