[신년사] Financial Supervisory Service “Prepare for cliff effect when corona support is reduced”

In 2020, the spread of the novel coronavirus infection (Corona 19) and the private equity crisis were overlaid, and we had a breathless year.

What is most regrettable is that when deregulation of private equity funds was discussed in 2014 and 2015, we should have stepped on the’break’ more confidently, but unfortunately we couldn’t.

Imitating Admiral Yi Sun-sin, who defeated the overwhelming enemy with twelve ships, instead of blaming the lack of supervisory means, we must mobilize all the capabilities of the organization to do our best.

In addition, in-depth discussion is needed on what is an effective financial supervisory system in order to effectively prevent recurring financial accidents and restore trust in finance through them.

In the new year of 2021, uncertainties in the domestic and overseas economy and finance are expected to persist for a considerable period.

The financial sector needs to preemptively prepare for the delay in economic recovery due to the prolonged Corona 19 and the expected cliff effect when financial support is reduced. We must urge financial companies to improve their ability to absorb losses, accumulate sufficient provisions, and instruct them to strengthen capital management.

We must strive to strengthen our financial intermediary capabilities. It is necessary to promote efficient allocation of limited resources by encouraging financial companies to improve their ability to select innovative companies and improve the constitution of SMEs.

Efforts to expand inclusive finance must be further strengthened.

When the financial support for Corona 19 is completed in the future, self-employed and vulnerable borrowers may face heavy debt burdens at once. In preparation for this, the debt adjustment system must be reorganized in advance, and financial and management consulting support must be expanded to help them recover.

The digitalization of finance is accelerating as the non-face-to-face culture spreads due to Corona 19. We must continue to build the foundation for sustainable financial innovation.

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